Rsp5 is a homologous to E6AP C terminus (HECT) ubiquitin ligase (E3) that controls many different cellular processes in budding yeast. Although Rsp5 targets a number of different substrates for ubiquitination, the mechanisms that regulate Rsp5 activity remain poorly understood. Here we demonstrate that Rsp5 carries a noncovalent ubiquitin-binding site in its catalytic HECT domain. The N-terminal lobe of the HECT domain mediates binding to ubiquitin, and point mutations that disrupt interactions with ubiquitin alter the ability of the Rsp5 HECT domain to assemble polyubiquitin chains in vitro. Point mutations that disrupt ubiquitin binding also result in temperature-sensitive growth defects in yeast, indicating that the Rsp5 ubiquitin-binding site is important for Rsp5 function in vivo. The Nedd4 HECT domain N-lobe also contains ubiquitin-binding activity, suggesting that interactions between the N-lobe and ubiquitin are conserved within the Nedd4 family of ubiquitin ligases. We propose that a subset of HECT E3s are regulated by a conserved ubiquitin-binding site that functions to restrict the length of polyubiquitin chains synthesized by the HECT domain.