Monoubiquitination and deubiquitination of FANCD2:FANCI heterodimer is central to DNA repair in a pathway that is defective in the cancer predisposition syndrome Fanconi anemia (FA). The “FA core complex” contains the RING-E3 ligase FANCL and seven other essential proteins that are mutated in various FA subtypes. Here, we purified recombinant FA core complex to reveal the function of these other proteins. The complex contains two spatially separate FANCL molecules that are dimerized by FANCB and FAAP100. FANCC and FANCE act as substrate receptors and restrict monoubiquitination to the FANCD2:FANCI heterodimer in only a DNA-bound form. FANCA and FANCG are dispensable for maximal in vitro ubiquitination. Finally, we show that the reversal of this reaction by the USP1:UAF1 deubiquitinase only occurs when DNA is disengaged. Our work reveals the mechanistic basis for temporal and spatial control of FANCD2:FANCI monoubiquitination that is critical for chemotherapy responses and prevention of Fanconi anemia. Display omitted •Reconstitution of the Fanconi anemia (FA) pathway using recombinant proteins•FANCB dimer coordinates FANCD2:FANCI monoubiquitination by two FANCL RING-ligases•FANCC and FANCE provide FANCL specificity toward DNA-bound FANCD2:FANCI dimers•Deubiquitination of FANCD2:FANCI by USP1:UAF1 occurs only when DNA is removed van Twest et al. report the biochemical reconstitution of FANCI:FANCD2 monoubiquitination by the Fanconi anemia core complex using only recombinant proteins. The authors uncover the mechanistic basis for temporal and spatial control of FANCD2:FANCI monoubiquitination that is critical for chemotherapy responses and prevention of Fanconi anemia.