The protein ISG15 encoded by interferon-stimulated gene (ISG) 15 is the first identified member of the ubiquitin-like protein family and exists in the form of monomers and conjugated complexes. Like ubiquitin, ISG15 can mediate an ubiquitin-like modification by covalently modifying other proteins, known as ISGylation. There is growing evidence showing that both the free and conjugated ISG15 are involved in multiple key cellular processes, including autophagy, exosome secretion, DNA repair, immune regulation, and cancer occurrence and progression. In this review, we aim to further clarify the function of ISG15 and ISGylation in cancer, demonstrate the important relationship between ISG15/ISGylation and cancer, and emphasize new insights into the different roles of ISG15/ISGylation in cancer progression. This review may contribute to therapeutic intervention in cancer. However, due to the limitations of current research, the regulation of ISG15/ISGylation on cancer progression is not completely clear, thus further comprehensive and sufficient correlation studies are still needed.