NEDD8 (Neural precursor cell expressed developmentally downregulated protein 8) is an ubiquitin-like protein that is covalently attached to a lysine residue of a protein substrate through a process known as neddylation, catalyzed by the enzyme cascade, namely NEDD8 activating enzyme (E1), NEDD8 conjugating enzyme (E2), and NEDD8 ligase (E3). The substrates of neddylation are categorized into cullins and non-cullin proteins. Neddylation of cullins activates CRLs (cullin RING ligases), the largest family of E3 ligases, whereas neddylation of non-cullin substrates alters their stability and activity, as well as subcellular localization. Significantly, the neddylation pathway and/or many neddylation substrates are abnormally activated or over-expressed in various human diseases, such as metabolic disorders, liver dysfunction, neurodegenerative disorders, and cancers, among others. Thus, targeting neddylation becomes an attractive strategy for the treatment of these diseases. In this review, we first provide a general introduction on the neddylation cascade, its biochemical process and regulation, and the crystal structures of neddylation enzymes in complex with cullin substrates; then discuss how neddylation governs various key biological processes via the modification of cullins and non-cullin substrates. We further review the literature data on dysregulated neddylation in several human diseases, particularly cancer, followed by an outline of current efforts in the discovery of small molecule inhibitors of neddylation as a promising therapeutic approach. Finally, few perspectives were proposed for extensive future investigations.