Proteasome-bearing bacteria make use of a ubiquitin-like modification pathway to target proteins for proteasomal turnover. In a process termed pupylation, proteasomal substrates are covalently modified with the small protein Pup that serves as a degradation signal. Pup is attached to substrate proteins by action of PafA. Prior to its attachment, Pup needs to undergo deamidation at its C-terminal residue, converting glutamine to glutamate. This step is catalyzed in vitro by Dop. In order to characterize Dop activity in vivo, we generated a dop deletion mutant in Mycobacterium smegmatis. In the Deltadop strain, pupylation is severely impaired and the steady-state levels of two known proteasomal substrates are drastically increased. Pupylation can be re-established by complementing the mutant with either DopWt or a Pup variant carrying a glutamate at its ultimate C-terminal position (PupGGE). Our data show that Pup is deamidated by Dop in vivo and that likely Dop alone is responsible for this activity. Furthermore, we demonstrate that a putative N-terminal ATP binding motif is crucial for catalysis, since a single point mutation (E10A) in this motif abolishes Dop activity both in vivo and in vitro.