Ubiquitylation controls protein function and degradation. Therefore, ubiquitin ligases need to be tightly controlled. We discovered an evolutionarily conserved allosteric restraint mechanism for Nedd4 ligases and demonstrated its function with diverse substrates: the yeast soluble proteins Rpn10 and Rvs167, and the human receptor tyrosine kinase FGFR1 and cardiac IKS potassium channel. We found that a potential trimerization interface is structurally blocked by the HECT domain α1-helix, which further undergoes ubiquitylation on a conserved lysine residue. Genetic, bioinformatics, biochemical and biophysical data show that attraction between this α1-conjugated ubiquitin and the HECT ubiquitin-binding patch pulls the α1-helix out of the interface, thereby promoting trimerization. Strikingly, trimerization renders the ligase inactive. Arginine substitution of the ubiquitylated lysine impairs this inactivation mechanism and results in unrestrained FGFR1 ubiquitylation in cells. Similarly, electrophysiological data and TIRF microscopy show that NEDD4 unrestrained mutant constitutively downregulates the IKS channel, thus confirming the functional importance of E3-ligase autoinhibition.