By exploiting (125)I-polyubiquitin chain formation as a functional readout of enzyme activity, we have quantitatively examined the mechanism of human E6AP/UBE3A for the first time. Initial rate studies identify UbcH7 as the cognate E2 carrier protein for E6AP, although related Ubc5 isoforms and the ISG15-specific UbcH8 paralog also support E6AP with reduced efficacy due to impaired binding and catalytic competence. Initial rates of polyubiquitin chain formation displayed hyperbolic kinetics with respect to UbcH7 concentration (K(m) = 57.6 ± 5.7 nM and kcat = 0.032 ± 0.001 s(-1)) and substrate inhibition above 2 μM. Competitive inhibition by an isosteric UbcH7C86S-ubiquitin oxyester substrate analog (K(i) = 64 ± 18 nM) demonstrates that Km reflects intrinsic substrate affinity. In contrast, noncompetitive inhibition by a UbcH7C86A product analog (K(i) = 7 ± 0.7 μM) and substrate inhibition at high concentrations require two functionally distinct E2∼ubiquitin substrate binding sites. The kinetics of polyubiquitin chain formation reflect binding at a cryptic Site 1 not previously recognized that catalyzes E6AP∼ubiquitin thioester formation. Subsequent binding of E2∼ubiquitin at the canonical Site 2 present in the extant crystal structure is responsible for polyubiquitin chain elongation. Other rate studies show that the conserved -4 Phe(849) residue is required for polyubiquitin chain formation rather than target protein conjugation as originally suggested. The present studies unambiguously preclude earlier models for the mechanism of Hect domain-catalyzed conjugation through the canonical binding site suggested by the crystal structure and define a novel two-step mechanism for formation of the polyubiquitin degradation signal.