The ubiquitin system plays a pivotal role in the regulation of immune responses. This system includes a large family of E3 ubiquitin ligases of over 700 proteins and about 100 deubiquitinating enzymes, with the majority of their biological functions remaining unknown. Over the last decade, through a combination of genetic, biochemical, and molecular approaches, tremendous progress has been made in our understanding of how the process of protein ubiquitination and its reversal deubiquitination controls the basic aspect of the immune system including lymphocyte development, differentiation, activation, and tolerance induction and regulates the pathophysiological abnormalities such as autoimmunity, allergy, and malignant formation. In this review, we selected some of the published literature to discuss the roles of protein-ubiquitin conjugation and deubiquitination in T-cell activation and anergy, regulatory T-cell and T-helper cell differentiation, regulation of NF-κB signaling, and hematopoiesis in both normal and dysregulated conditions. A comprehensive understanding of the relationship between the ubiquitin system and immunity will provide insight into the molecular mechanisms of immune regulation and at the same time will advance new therapeutic intervention for human immunological diseases.