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. Its target proteins include SERPINA3G/SPI2A, JAK1, MAPK3/ERK1, PLCG1, TRIM25, STAT5A, MAPK1/ERK2 and globin. Isgylation of the viral sensor IFIH1/MDA5 promotes IFIH1/MDA5 oligomerization and triggers activation of innate immunity against a range of viruses, including coronaviruses, flaviviruses and picornaviruses. Can also isgylate: DDX58/RIG-I which inhibits its function in antiviral signaling response, IRF3 which inhibits its ubiquitination and degradation as well as EIF4E2 which enhances its cap structure-binding activity and translation-inhibition activity. Exhibits antiviral activity towards both DNA and RNA viruses, including influenza A and B virus, sindbis virus (SV) and herpes simplex type-1 (HHV-1). Plays a significant role in the control of neonatal Chikungunya virus (CHIKV) infection by acting as a putative immunomodulator of pro-inflammatory cytokines. Protects mice against the consequences of Chikungunya virus infection by down-regulating the pathogenic cytokine response, often denoted as the cytokine storm. Plays a role in erythroid differentiation. The secreted form of ISG15 can: induce natural killer cell proliferation, act as a chemotactic factor for neutrophils and act as a IFN-gamma-inducing cytokine playing an essential role in antimycobacterial immunity. 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). 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. 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 (By similarity).