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The ubiquitin-proteasome pathway (UPP) is essential for proteostasis and cellular homeostasis. Most of the human proteins are degraded through the UPP in which proteins should be tagged with a specific polyubiquitin chain in a sequential cascade of E1 ubiquitin (Ub)-activating enzymes, namely, E2 Ub-conjugating enzymes and E3 Ub ligases. Meanwhile, the ubiquitination process can be reversed by deubiquitinating enzymes (DUBs), which protect the target proteins from ubiquitination, and so far, around 100 DUBs have been reported to present in human cells. Ubiquitin-specific protease 7 (USP7) is a member of the DUBs family, which has been reported to play crucial role in the development of human tumors and diseases; however, the molecular mechanisms of disease and malignant tumor progression mediated by USP7 has not been fully elucidated. In addition, the therapeutic potential of USP7 in cancer treatment remains to be further explored. Therefore, this review begins with a review of the structure and function of USP7, and then focuses on the development of USP7 inhibitors and their potential applications in various human diseases.