Ubiquitylation of the eukaryotic sliding clamp, PCNA, activates a pathway of DNA damage bypass that facilitates the replication of damaged DNA. In its monoubiquitylated form, PCNA recruits a set of damage-tolerant DNA polymerases for translesion synthesis. Alternatively, modification by K63-linked polyubiquitylation triggers a recombinogenic process involving template switching. Despite the identification of proteins interacting preferentially with polyubiquitylated PCNA, the molecular function of the chain and the relevance of its K63-linkage are poorly understood. Using genetically engineered mimics of polyubiquitylated PCNA, we have now examined the properties of the ubiquitin chain required for damage bypass in budding yeast. By varying key parameters such as the geometry of the junction, cleavability and capacity for branching, we demonstrate that either the structure of the ubiquitin-ubiquitin junction or its dynamic assembly or disassembly at the site of action exert a critical impact on damage bypass, even though known effectors of polyubiquitylated PCNA are not strictly linkage-selective. Moreover, we found that a single K63-junction supports substantial template switching activity, irrespective of its attachment site on PCNA. Our findings provide insight into the interrelationship between the two branches of damage bypass and suggest the existence of a yet unidentified, highly linkage-selective receptor of polyubiquitylated PCNA.