The precise functions are diverse and vary among species but include potentiation of Interferon gamma (IFN-II) production in lymphocytes, ubiquitin-like conjugation to newly-synthesized proteins and negative regulation of the IFN-I response.

The immature polypeptide is cleaved at its carboxy terminus, generating a mature 15 kDa product that terminates with a LRLRGG motif, as found in ubiquitin.

[8] After induction by type I interferon, ISG15 can be found in three forms, each with unique functions: ISG15 is secreted from the cell and can be detected in supernatant or blood plasma.

In a ubiquitin-like fashion, ISG15 is covalently linked by its C-terminal LRLRGG motif to lysine residues on newly synthesized proteins.

Only one deconjugating protease with specificity to ISG15 has been identified to date: USP18 (a member of the USP family) cleaves ISG15-peptide fusions and also removes ISG15 (deISGylation) from native conjugates.

Basal ganglia calcification is observed in all patients reported to date and represents the underlying autoinflammatory disease of excessive IFN-I activity, known as type I interferonopathy.

[20][21] In 1987 it was identified that ISG15 cross-reacts with anti-ubiquitin antibodies, and subsequent experiments uncovered the ubiquitin-like conjugation of ISG15 to other cellular proteins, coined "ISGylation".

[12] In fact, follow-up studies uncovered enhanced type I IFN signatures, manifesting as basal ganglia calcifications akin to TORCH infection but without an infectious etiology.