The bacterial pathogen Legionella pneumophila modulates host immunity using effectors translocated by its Dot/Icm transporter to facilitate its intracellular replication. A number of these effectors employ diverse mechanisms to interfere with protein ubiquitination, a post-translational modification essential for immunity. Here, we have found that L. pneumophila induces monoubiquitination of the E2 enzyme UBE2N by its Dot/Icm substrate MavC(Lpg2147). We demonstrate that MavC is a transglutaminase that catalyses covalent linkage of ubiquitin to Lys92 and Lys94 of UBE2N via Gln40. Similar to canonical transglutaminases, MavC possess deamidase activity that targets ubiquitin at Gln40. We identified Cys74 as the catalytic residue for both ubiquitination and deamidation activities. Furthermore, ubiquitination of UBE2N by MavC abolishes its activity in the formation of K63-type polyubiquitin chains, which dampens NF-κB signalling in the initial phase of bacterial infection. Our results reveal an unprecedented mechanism of modulating host immunity by modifying a key ubiquitination enzyme by ubiquitin transglutamination.