The vaccinia virus (VACV) E3 protein is essential for virulence and has antiapoptotic activity and the ability to impair the host innate immune response. Here we demonstrate that E3 interacts with SUMO1 through a small ubiquitin-like modifier (SUMO)-interacting motif (SIM). SIM integrity is required for maintaining the stability of the viral protein and for the covalent conjugation of E3 to SUMO1 or SUMO2, a modification that has a negative effect on the E3 transcriptional transactivation of the p53-upregulated modulator of apoptosis (PUMA) and APAF-1 genes. We also demonstrate that E3 is ubiquitinated, a modification that does not destabilize the wild-type protein but triggers the degradation of an E3-ΔSIM mutant. This report constitutes the first demonstration of the important roles that both SUMO and ubiquitin play in the regulation of the VACV protein E3.