Protein UFMylation is emerging as a posttranslational modification essential for endoplasmic reticulum and cellular homeostasis. Despite its biological importance, we have a poor understanding of how UFM1 is conjugated onto substrates. Here, we use a rebuilding approach to define the minimal requirements of protein UFMylation. We find that the reported E3 ligase UFL1 is inactive on its own and identify UFBP1 to bind UFL1 to form an active E3 ligase complex. While UFC1 is an intrinsically Cys-reactive E2, we do not identify any catalytic cysteines on UFL1/UFBP1, suggesting a scaffold-type E3 ligase mechanism. Interestingly, the E3 ligase complex consists of winged-helix (WH) domain repeats that activate UFC1 for aminolysis. We identify the adaptor protein CDK5RAP3 to bind to and regulate E3 ligase activity potentially by preventing off-target UFMylation. In summary, our work identifies the minimal requirements for UFMylation and reveals regulatory principles of this atypical E3 ligase complex.