SMT3 of Saccharomyces cerevisiae is an essential gene encoding a ubiquitin-like protein similar to mammalian SUMO-1. When a tagged Smt3 or human SUMO-1 was expressed from GAL1 promoter, either gene rescued the lethality of the smt3 disruptant. By indirect-immunofluorescent microscopy, the HA-tagged Smt3 was detected mostly in nuclei and also at the mother-bud neck just like septin fibers. Indeed immunoprecipitation experiments revealed that Cdc3, one of septin components, was modified with Smt3. Furthermore, the protein level of the Cdc3-Smt3 conjugate was reduced and the septin rings disappeared in a ubc9-1 mutant at a restrictive temperature, where the Smt3 conjugation system should be defective. Thus, we conclude that Smt3 was conjugated to Cdc3 in septin rings localized at the mother-bud neck. Around the time of cytokinesis the Cdc3-Smt3 conjugate disappeared. We discuss the biological significance of this Smt3 conjugation to a septin component.