Autophagy is a cellular degradation pathway involving the shape transformation of lipid bilayers. During the onset of autophagy, the water-soluble protein Atg8 binds covalently to phosphatdylethanolamines (PEs) in the membrane in an ubiquitin-like reaction coupled to ATP hydrolysis. We reconstituted the Atg8 conjugation system in giant and nm-sized vesicles with a minimal set of enzymes and observed that formation of Atg8-PE on giant vesicles can cause substantial tubulation of membranes even in the absence of Atg12-Atg5-Atg16. Our findings show that ubiquitin-like processes can actively change properties of lipid membranes and that membrane crowding by proteins can be dynamically regulated in cells. Furthermore we provide evidence for curvature sorting of Atg8-PE. Curvature generation and sorting are directly linked to organelle shapes and, thus, to biological function. Our results suggest that a positive feedback exists between the ubiquitin-like reaction and the membrane curvature, which is important for dynamic shape changes of cell membranes, such as those involved in the formation of autophagosomes.