Virus infection or interferon can stimulate robust expression of the protein ISG15 that is encoded by interferon stimulated gene 15, which was the first unbiquitin-like molecule identified two decades ago. While ubiquitin and its many important functions have been well established, the functions of ISG15 and its post-translational conjugation are still largely unknown . Recently, some specific enzymes have been identified to be involved in the ISG15 modification system, suggests that ISG15 and its modification system play important roles in the innate immune response and regulation of interferon signaling. The history of ISG15 discovery and its biochemical characterization were briefly introduced. Then such topics as the ISG15 gene expression and the ISG15 modification will be focued on, and finally summarize new findings which have implications for ISG15 and its modification system in immunology and interferon signal transduction were summarized.