Aberrant activation of Wnt/β-catenin signaling is closely associated with the development of various human cancers, especially colorectal cancers (CRC). The ubiquitin proteasome system (UPS) is essential in the regulation of Wnt signaling and inhibitors targeting the UPS could have great potential in CRC therapy. Ubiquitin-specific protease 7 (USP7), a deubiquitinating enzyme, plays a significant role in neoplastic diseases due to its well-known function of regulating the MDM2-p53 complex. Inspired by our recent study identifying the positive role of USP7 in the Wnt signaling, we report here that USP7 is overexpressed in colorectal carcinoma cell lines and tissues, which is closely related with the poor prognosis. USP7 knockdown inhibits the proliferation of CRC cells with different p53 status, and USP7 inhibition by its inhibitor P5091 attenuates the activity of Wnt signaling via enhanced ubiquitination and the subsequent degradation of β-catenin. In vitro, P5091 inhibited the proliferation and induced apoptosis of CRC cells. P5091 also suppressed in vivo tumor growth in the HCT116 xenograft mouse model, which is consistently associated with reduced expression of β-catenin and Wnt target genes. In conclusion, our preclinical study indicated that USP7 could be a potential drug target and its inhibitor P5091 deserves further development as anticancer agent for Wnt hyper-activated CRC therapy.