Epigenetic regulators and posttranslational modifications of proteins play important roles in various kinds of cancer cell death, including ferroptosis, a non‐apoptotic form of cell death. However, the interplay of chromatin modifiers and deubiquitinase (DUB) in ferroptosis remains unclear. Here, we found that ubiquitin‐specific protease 5 (USP5) is regarded as a bona fide DUB of lymphoid‐specific helicase (LSH), a DNA methylation repressor, in hepatocellular carcinoma (HCC). Functional studies reveal that USP5 interacts with LSH and stabilizes LSH by a deubiquitylation activity‐dependent process. Furthermore, the USP5‐mediated deubiquitination of LSH facilitates the tumorigenesis of HCC by upregulating solute carrier family 7 member 11 (SLC7A11) to suppress ferroptosis of liver cancer cells. Moreover, the USP5 inhibitor degrasyn inhibits DUB activities of USP5 to LSH to suppress the progression of HCC. Additionally, USP5 and LSH are positively correlated and both are overexpressed and linked to poor prognosis in HCC patients. Together, our findings show that USP5 interacts with LSH directly and enhances LSH protein stability through deubiquitination, which, in turn, promotes the development of HCC by suppressing ferroptosis of liver cancer cells, suggesting that USP5 may be a potential therapeutic target for HCC.