Ubiquitin-like protein which plays a key role in the innate immune response to viral infection either via its conjugation to a target protein (ISGylation) or via its action as a free or unconjugated protein. ISGylation involves a cascade of enzymatic reactions involving E1, E2, and E3 enzymes which catalyze the conjugation of ISG15 to a lysine residue in the target protein. Exhibits antiviral activity towards both DNA and RNA viruses. The secreted form of ISG15 can: induce natural killer cell proliferation, augment lymphokine-activated-killer (LAK) activity, induce dendritic cell maturation, act as a chemotactic factor for neutrophils and act as a IFN-gamma-inducing cytokine playing an essential role in antimycobacterial immunity (By similarity). The secreted form acts through the integrin ITGAL/ITGB2 receptor to initiate activation of SRC family tyrosine kinases including LYN, HCK and FGR which leads to secretion of IFNG and IL10; the interaction is mediated by ITGAL (By similarity). In response to IFN-tau secreted by the conceptus, may ligate to and regulate proteins involved in the release of prostaglandin F2-alpha (PGF), and thus prevent lysis of the corpus luteum and maintain the pregnancy (PubMed:9546718). Homodimer; disulfide-linked (By similarity). Interacts with, and is conjugated to its targets by the UBE1L (E1 enzyme) and UBE2E2 (E2 enzyme) (By similarity). Interacts with NEDD4 (By similarity). Exists in three distinct states: free within the cell, released into the extracellular space, or conjugated to target proteins. Expressed in endometrium and uterine flushings of pregnant cow. Also secreted. Not detected in spleen, liver, corpus luteum or muscle. Follows the pattern of expression of interferon tau by the conceptus. First appears on day 15 of pregnancy in endometrium of cows, reaches a maximum on day 18 and remains high through day 26. By type I interferons. Both the Ubiquitin-like 1 and Ubiquitin-like 2 domains are required for its efficient conjugation to cellular proteins. The two domains play different roles in the ISGylation pathway: Ubiquitin-like 2 domain is necessary for the first two steps allowing the linking of ISG15 to the E1 and E2 enzymes while Ubiquitin-like 1 domain is essential for the final, E3-mediated transfer of ISG15, from the E2 to the Lys of the target protein. S-nitrosylation decreases its dimerization, thereby increasing the availability as well as the solubility of monomeric ISG15 for its conjugation to cellular proteins. Induced as an inactive, precursor protein that is cleaved by specific proteases to expose the C-terminal diglycine (LRLRGG) motif. This motif is essential not only for its conjugation to substrates but also for its recognition by the relevant processing proteases.