SUMO post-translational modification of proteins or SUMOylation ensures normal cell function. Disruption of SUMO dynamics prompts various pathophysiological conditions, including cancer. The burden of deSUMOylating the large SUMO-proteome rests on 6 full-length mammalian SUMO-proteases or SENP. While multiple SENP isoforms exist, the function of these isoforms remains undefined. We now delineate the biological role of a novel SENP7 isoform SENP7S in mammary epithelial cells. SENP7S is the predominant SENP transcript in human mammary epithelia but is significantly reduced in precancerous ductal carcinoma in situ and all breast cancer subtypes. Like other SENP family members, SENP7S has SUMO isopeptidase activity but unlike full-length SENP7L, SENP7S is localized in the cytosol. In vivo, SUMOylated β-catenin and Axin1 are both SENP7S-substrates. With knockdown of SENP7S in mammary epithelial cells, Axin1-β-catenin interaction is lost and β-catenin escapes ubiquitylation-dependent proteasomal degradation. SUMOylated β-catenin accumulates at the chromatin and activates multiple oncogenes. Hence, non-tumorigenic MCF10-2A cells with reduced SENP7S exhibit greater cell proliferation and anchorage-dependent growth. SENP7S depletion directly potentiates tumorigenic properties of MCF10-2A cells with induction of anchorage-independent growth and self-renewal in 3D-spheroid conditions. Collectively, the results identify SENP7S as a novel mediator of β-catenin signaling and normal mammary epithelial cell physiology.