Ubiquitin-fold modifier 1 (UFM1), a newly identified ubiquitin-like molecule (UBLs), is evolutionarily expressed in multiple species except yeast. Similarly to ubiquitin, UFM1 is covalently attached to its substrates through a well-orchestrated three-step enzymatic reaction involving E1, the UFM1-activating enzyme (ubiquitin-like modifier-activating enzyme 5, UBA5); E2, the UFM1-conjugating enzyme 1 (UFC1); and E3, the UFM1-specific ligase 1 (UFL1). To date, numerous studies have shown that UFM1 modification is implicated in various cellular processes, including endoplasmic reticulum (ER) stress, DNA damage response and erythroid development. An abnormal UFM1 cascade is closely related to a variety of diseases, especially tumors. Herein, we summarize the process and functions of UFM1 modification, illustrating the relationship and mechanisms between aberrant UFMylation and diversified tumors, aiming to provide novel diagnostic biomarkers or therapeutic targets for cancer treatments.