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The E3 ligase substrate adapter cereblon (CRBN), the primary target of clinical agents thalidomide and lenalidomide, recognizes endogenous substrates bearing the C-terminal cyclic imide modification. Although C-terminal cyclic imides can form spontaneously, an enzyme that regulates their formation and thereby promotes a biological pathway connecting substrates to CRBN is unknown. Here we report that protein carboxymethyltransferase (PCMT1) promotes formation of C-terminal cyclic imides on C-terminal asparagine residues of CRBN substrates. PCMT1 and CRBN coregulate the levels of metabolic enzymes including glutamine synthetase and inorganic pyrophosphatase 1 in vitro, in cells and in vivo, and this regulation is associated with the proepileptic phenotype of CRBN knockout mouse models. The discovery of an enzyme that regulates CRBN substrates through the C-terminal cyclic imide reveals a previously unknown biological pathway that is perturbed by thalidomide derivatives and provides a biochemical basis for the connection between multiple biological processes and CRBN.