The modification of proteins with polyubiquitin chains alters their stability, localization and activity, thus regulating various aspects of cellular functions in eukaryotic cells. The ER quality control protein E3 gp78 catalyzes Lys48-linked polyubiquitin-chain- assembly on the Ube2g2 active site and is capable of transferring preassembled ubiquitin chains to its substrates. However, the underlying mechanism of polyubiquitin- chain-assembly remains elusive. Here, we demonstrate that the active site-linked ubiquitin chain is extended from the distal end by the cooperative actions of the G2BR and CUE domains of gp78. The G2BR domain is involved in ubiquitin chain synthesis by binding to the donor Ube2g2~Ub and promoting ubiquitin transfer from the E2 in cis. The CUE domain shows preferential binding to the ubiquitin chain compared to monoubiquitin and helps to position the distal ubiquitin in the correct orientation to attack the Ube2g2~Ub thioester bond. Our studies reveal that two interactions, one between the donor Ube2g2~Ub and the gp78 G2BR domain and another between the Ube2g2-linked ubiquitin chain and the gp78 CUE domain, cooperatively drive polyubiquitin-chain-assembly on the Ube2g2 active site.