During DNA damage response, the RING E3 ligase RNF168 ubiquitinates nucleosomal H2A at K13-15. Here we show that the ubiquitination reaction is regulated by its substrate. We define a region on the RING domain important for target recognition and identify the H2A/H2B dimer as the minimal substrate to confer lysine specificity to the RNF168 reaction. Importantly, we find an active role for the substrate in the reaction. H2A/H2B dimers and nucleosomes enhance the E3-mediated discharge of ubiquitin from the E2 and redirect the reaction towards the relevant target, in a process that depends on an intact acidic patch. This active contribution of a region distal from the target lysine provides regulation of the specific K13-15 ubiquitination reaction during the complex signalling process at DNA damage sites.