Ubiquitin (Ub) functions in many different biological pathways, where it typically interacts with proteins that contain modular Ub recognition domains. One such recognition domain is the Npl4 zinc finger (NZF), a compact zinc-binding module found in many proteins that function in Ub-dependent processes. We now report the solution structure of the NZF domain from Npl4 in complex with Ub. The structure reveals that three key NZF residues (13TF14/M25) surrounding the zinc coordination site bind the hydrophobic 'Ile44' surface of Ub. Mutations in the 13TF14/M25 motif inhibit Ub binding, and naturally occurring NZF domains that lack the motif do not bind Ub. However, substitution of the 13TF14/M25 motif into the nonbinding NZF domain from RanBP2 creates Ub-binding activity, demonstrating the versatility of the NZF scaffold. Finally, NZF mutations that inhibit Ub binding by the NZF domain of Vps36/ESCRT-II also inhibit sorting of ubiquitylated proteins into the yeast vacuole. Thus, the NZF is a versatile protein recognition domain that is used to bind ubiquitylated proteins during vacuolar protein sorting, and probably many other biological processes.