NEDDylation is a type of protein post‐translational modification that has high similarity to ubiquitination. UBE1C encodes NEDDylation E1 enzyme, locates at chromatin region 3p14.1 and shows high gene dosage amplification frequency in both Asian and Caucasian lung cancer patients. However, its NEDDylation substrates and roles in tumorigenesis remain elucidated. In this study, we aim to investigate the oncogenic role of UBE1C and its involvement in how NEDDylation regulates p53 in lung cancer. We found that UBE1C mRNA overexpression and DNA amplification in most of the lung cell lines and cancer patients. Patients with UBE1C overexpression showed poor prognosis. Moreover, we demonstrated that overexpression of UBE1C and NEDD8, a NEDDylation moiety, resulted in the p53 NEDDylation with inhibition of p53 acetylation at K373 residue. Importantly, UBE1C‐mediated NEDDylation downregulated the transcriptional activity of p53 by inhibiting p53 ability to target promoter regions of its downstream transcription targets, consequently inhibiting the promoter activities and the expression of mRNA and protein of the p53 downstream genes including p21 and PTEN. In addition, UBE1C and NEDD8 overexpression promoted migration, invasion, and proliferation of lung cancer cells. Our findings suggest that UBE1C acts as an oncogene with prognostic potential and highlight a potential role of UBE1C‐mediated NEDDylation in downregulation of p53 transcriptional activity in lung cancer.