Cullin (Cul)-based E3 ubiquitin ligases are activated through the attachment of Nedd8 to the Cul protein. In yeast, Dcn1 (defective in Cul neddylation 1 protein) functions as a scaffold-like Nedd8 E3-ligase by interacting with its Cul substrates and the Nedd8 E2 Ubc12. Human cells express 5 Dcn1-like (DCNL) proteins each containing a C-terminal potentiating neddylation domain but distinct amino-terminal extensions. Although the UBA-containing DCNL1 and DCNL2 are likely functional homologues of yeast Dcn1, DCNL3 also interacts with human Culs and is able to complement the neddylation defect of yeast dcn1Delta cells. DCNL3 down-regulation by RNAi decreases Cul neddylation, and overexpression of a Cul3 mutant deficient in DCNL3 binding interferes with Cul3 function in vivo. Interestingly, DCNL3 accumulates at the plasma membrane through a conserved, lipid-modified motif at the N terminus. Membrane-bound DCNL3 is able to recruit Cul3 to membranes and is functionally important for Cul3 neddylation in vivo. We conclude that DCNL proteins function as nonredundant Cul Nedd8-E3 ligases. Moreover, the diversification of the N termini in mammalian Dcn1 homologues may contribute to substrate specificity by regulating their subcellular localization.