Of all ubiquitin-like proteins, Rub1 (Nedd8 in mammals) is the closest kin of ubiquitin. We show by NMR that structurally Rub1 and ubiquitin are fundamentally similar as well. Despite these profound similarities, the prevalence of Rub1/Nedd8 or ubiquitin as modifiers of the proteome is starkly different, and their attachment to specific substrates performs different functions. Recently, some proteins, including p53, p73, EGFR, caspase-7, and Parkin, have been shown to be modified by both Rub1/Nedd8 and ubiquitin within cells. To understand whether and how it may be possible to distinguish among the same target protein modified by Rub1 or ubiquitin or both, we examined if ubiquitin receptors can differentiate between Rub1 and ubiquitin. Surprisingly, Rub1 interacts with proteasome ubiquitin-shuttle proteins comparably to ubiquitin, but binds weaker to a proteasomal ubiquitin-receptor Rpn10. We identified Rub1-ubiquitin heteromers in yeast and Nedd8-Ub heteromers in human cells. We validate that in human cells and in vitro, human Rub1 (Nedd8) forms chains with ubiquitin where it acts as a chain terminator. Interestingly, enzymatically assembled K48-linked Rub1-ubiquitin heterodimers are recognized by various proteasomal ubiquitin-shuttles and receptors comparably to K48-linked ubiquitin-homodimers. Furthermore, these heterologous chains are cleaved by COP9 signalosome or 26S proteasome. A derubylation function of the proteasome expands the repertoire of its enzymatic activities. In contrast, Rub1 conjugates may be somewhat resilient to action of other canonical DUBs. Taken together, these findings suggest that once Rub1/Nedd8 is channeled into ubiquitin-pathways, it is recognized essentially like ubiquitin.