The chromobox (CBX) proteins mediate epigenetic gene silencing and have been implicated in the cancer development. By analyzing eight CBX family members in TCGA dataset, we found that chromobox 7 (CBX7) was the most strikingly downregulated CBX family member in urinary bladder cancer (UBC), as compared to normal tissues. Though dysregulation of CBX7 has been reported in multiple cancers, its specific role and clinical relevance in UBC remain unclear. Herein, we found that frequent downregulation of CBX7 in UBC specimens, which was due to its promoter hypermethylation, was correlated with poor prognosis. The ectopic expression of CBX7 suppressed UBC cell proliferation, migration, invasion, and cancer stemness, whereas CBX7 depletion promoted cancer cell aggressiveness. Importantly, CBX7 overexpression in UBC cells inhibited tumorigenicity, whereas CBX7 depletion promoted the tumor development, indicating its tumor-suppressive role in UBC. Using RNA-seq and chromosome immunoprecipitation (ChIP) assays, we identified aldo-keto reductase family 1 member 10 (AKR1B10) as a novel downstream target of CBX7, which was negatively modulated by CBX7 in a PRC1-dependent manner and involved in stimulating ERK signaling. Consistently, AKR1B10 overexpression induced cancer cell aggressiveness, whereas suppression of AKR1B10 by siRNA or its small molecular inhibitor, oleanolic acid, reversed the CBX7 deficiency-induced cellular effects. AKR1B10 overexpression was negatively associated with CBX7 downregulation and predicted poor clinical outcomes in UBC patients. Taken together, our results indicate that CBX7 functions as a tumor suppressor to downregulate AKR1B10 and further inactivates ERK signaling. This CBX7/AKR1B10/ERK signaling axis may provide a new therapeutic strategy against UBC.