The ubiquitin-like protein Urm1 can be covalently conjugated to other proteins, such as the yeast thioredoxin peroxidase protein Ahp1p, through a mechanism involving the ubiquitin E1-like enzyme Uba4. Recent findings have revealed a second function of Urm1 as a sulphur carrier in the thiolation of eukaryotic cytoplasmic transfer RNAs (tRNAs). Interestingly, this new role of Urm1 is similar to the sulphur-carrier activity of its prokaryotic counterparts, strengthening the hypothesis that Urm1 is a molecular fossil of the ubiquitin-like protein family. Here, we discuss the function of Urm1 in light of its dual role in protein and RNA modification.