The Nedd8 activating enzyme (NAE) launches the transfer of the ubiquitin-like protein Nedd8 through an enzymatic cascade to covalently modify a diverse array of proteins, thus regulating their biological functions in the cell. The C-terminal peptide of Nedd8 extends deeply into the active site of NAE and plays an important role in specific recognition of Nedd8 by NAE. We used phage display to profile C-terminal sequences of Nedd8 that can be recognized by NAE for the activation reaction. We found that besides the native Nedd8 sequence ending with 71LALRGG76, NAE can accommodate diverse changes at the Nedd8 C-terminus including Arg and Ile replacing Leu71, Leu, Ser and Gln replacing Ala72, and substitutions by bulky aromatic residues at positions 73 and 74. We also observed that short peptides corresponding to the C-terminal sequences of the Nedd8 variants can be activated by NAE to form peptide~NAE thioester conjugates. Once NAE is covalently loaded with these Nedd8-mimicking peptides, they can no longer activate full length Nedd8 for its transfer to the neddylation targets such as the cullin subunits of cullin-RING E3 ubiquitin ligases (CRLs). We have thus developed a new method to inhibit protein neddylation via Nedd8-mimicking peptides.