BMI1 is a core component of the polycomb repressive complex 1 (PRC1) and emerging data support a role of BMI1 in cancer. The central domain of BMI1 is involved in protein–protein interactions and is essential for its oncogenic activity. Here, we present the structure of BMI1 bound to the polyhomeotic protein PHC2 illustrating that the central domain of BMI1 adopts an ubiquitin-like (UBL) fold and binds PHC2 in a β-hairpin conformation. Unexpectedly, we find that the UBL domain is involved in homo-oligomerization of BMI1. We demonstrate that both the interaction of BMI1 with polyhomeotic proteins and homo-oligomerization via UBL domain are necessary for H2A ubiquitination activity of PRC1 and for clonogenic potential of U2OS cells. Here, we also emphasize need for joint application of NMR spectroscopy and X-ray crystallography to determine the overall structure of the BMI1–PHC2 complex.