In response to DNA damage, the Rad6/Rad18 ubiquitin-conjugating complex monoubiquitinates the replication clamp proliferating cell nuclear antigen (PCNA) at Lys-164. Although ubiquitination of PCNA is recognized as an essential step in initiating postreplication repair, the mechanistic relevance of this modification has remained elusive. Here, we describe a robust in vitro system that ubiquitinates yeast PCNA specifically on Lys-164. Significantly, only those PCNA clamps that are appropriately loaded around effector DNA by its loader, replication factor C, are ubiquitinated. This observation suggests that, in vitro, only PCNA present at stalled replication forks is ubiquitinated. Ubiquitinated PCNA displays the same replicative functions as unmodified PCNA. These functions include loading onto DNA by replication factor C, as well as Okazaki fragment synthesis and maturation by the PCNA-coordinated actions of DNA polymerase delta, the flap endonuclease FEN1, and DNA ligase I. However, whereas the activity of DNA polymerase zeta remains unaffected by ubiquitination of PCNA, ubiquitinated PCNA specifically activates two key enzymes in translesion synthesis: DNA polymerase eta, the yeast Xeroderma pigmentosum ortholog, and Rev1, a deoxycytidyl transferase that functions in organizing the mutagenic DNA replication machinery. We propose that ubiquitination of PCNA increases its functionality as a sliding clamp to promote mutagenic DNA replication.