The post-translational modification of proteins through the addition of UFM1, also known as ufmylation, plays a critical developmental role as revealed by studies in animal models. The recent finding that biallelic mutations in UBA5 (the E1-like enzyme for ufmylation) cause severe early-onset encephalopathy with progressive microcephaly implicates ufmylation in human brain development. More recently, a homozygous UFM1 variant was proposed as a candidate aetiology of severe early-onset encephalopathy with progressive microcephaly. Here, we establish a locus for severe early-onset encephalopathy with progressive microcephaly based on two families, and map the phenotype to a novel homozygous UFM1 mutation. This mutation has a significantly diminished capacity to form thioester intermediates with UBA5 and with UFC1 (the E2-like enzyme for ufmylation), with resulting impaired ufmylation of cellular proteins. Remarkably, in four additional families where eight children have severe early-onset encephalopathy with progressive microcephaly, we identified two biallelic UFC1 mutations, which impair UFM1-UFC1 intermediate formation with resulting widespread reduction of cellular ufmylation, a pattern similar to that observed with UFM1 mutation. The striking resemblance between UFM1- and UFC1-related clinical phenotype and biochemical derangements strongly argues for an essential role for ufmylation in human brain development. The hypomorphic nature of UFM1 and UFC1 mutations and the conspicuous depletion of biallelic null mutations in the components of this pathway in human genome databases suggest that it is necessary for embryonic survival, which is consistent with the embryonic lethal nature of knockout models for the orthologous genes.