The Fanconi Anemia (FA) pathway is a dedicated pathway for the repair of DNA interstrand crosslinks, and which is additionally activated in response to other forms of replication stress. A key step in the activation of the FA pathway is the monoubiquitination of each of the two subunits (FANCI and FANCD2) of the ID2 complex on specific lysine residues. However, the molecular function of these modifications has been unknown for nearly two decades. Here we find that ubiquitination of FANCD2 acts to increase ID2's affinity for double stranded DNA via promoting/stabilizing a large-scale conformational change in the complex, resulting in a secondary "Arm" ID2 interphase encircling DNA. Ubiquitination of FANCI, on the other hand, largely protects the ubiquitin on FANCD2 from USP1/UAF deubiquitination, with key hydrophobic residues of FANCI's ubiquitin being important for this protection. In effect, both of these post-translational modifications function to stabilise a conformation in which the ID2 complex encircles DNA.