Ubiquitination is a reversible post-translational modification implicated in cell differentiation, homeostasis, and organ development. Several deubiquitinases (DUBs) decrease protein ubiquitination through the hydrolysis of ubiquitin linkages. However, the role of DUBs in bone resorption and formation is still unclear. In this study, we identified DUB ubiquitin-specific protease 7 (USP7) as a negative regulator of osteoclast formation. USP7 combines with tumor necrosis factor receptor-associated factor 6 (TRAF6) and inhibits its ubiquitination by impairing the Lys63-linked polyubiquitin chain. Such impairment leads to the suppression of receptor activator of NF-κB ligand (RANKL)-mediated nuclear factor-κB (NF-κB) and mitogen-activated protein kinases (MAPKs) activation without affecting TRAF6 stability. USP7 also protects the stimulator of interferon genes (STING) against degradation, inducing interferon-β (IFN-β) expression in osteoclast formation, thereby inhibiting osteoclastogenesis cooperatively with the classical TRAF6 pathway. Furthermore, USP7 inhibition accelerates osteoclast differentiation and bone resorption both in vitro and in vivo. Contrarily, USP7 overexpression impairs osteoclast differentiation and bone resorption in vitro and in vivo. Additionally, in ovariectomy (OVX) mice, USP7 levels are lower than those in sham-operated mice, suggesting that USP7 plays a role in osteoporosis. Altogether, our data reveal the dual effect of USP7-mediated TRAF6 signal transduction and USP7-mediated protein degradation of STING in osteoclast formation.