Ubiquitin and ubiquitin-like modifications are central to virtually all cellular signaling pathways. They occur primarily on lysine residues of target proteins and stimulate a large number of downstream signals. The diversity of these signals depends on the type, location and dynamics of the modification, but the role of the exact site of modification and the selectivity for specific lysines are poorly understood. Here we review the current literature on lysine specificity in these modifications, and we highlight the known signaling mechanisms and the open questions that pose future challenges to ubiquitin research.