We have previously reported a gene expression signature that is a powerful predictor of poor clinical outcome in breast cancer. Among the seventy genes in this expression profile is a gene of unknown function: TSPYL5 (TSPY-like 5, also known as KIAA1750). TSPYL5 is located within a small region at chromosome 8q22 that is frequently amplified in breast cancer, which suggests that TSPYL5 has a causal role in breast oncogenesis. Here, we report that high TSPYL5 expression is an independent marker of poor outcome in breast cancer. Mass spectrometric analysis revealed that TSPYL5 interacts with ubiquitin-specific protease 7 (USP7; also known as herpesvirus-associated ubiquitin-specific protease; HAUSP). USP7 is the deubiquitylase for the p53 tumour suppressor and TSPYL5 reduces the activity of USP7 towards p53, resulting in increased p53 ubiquitylation. We demonstrate that TSPYL5 reduces p53 protein levels and inhibits activation of p53-target genes. Furthermore, expression of TSPYL5 overrides p53-dependent proliferation arrest and oncogene-induced senescence, and contributes to oncogenic transformation in multiple cell-based assays. Our data identify TSPYL5 as a suppressor of p53 function through its interaction with USP7.