The ubiquitin-proteasome system (UPS) is a crucial regulator of many proteins, tagging them with ubiquitin as a post-translational modification (PTM) to be identified by proteasome for degradation. The ubiquitination process utilizes a cascade of enzymes involving ubiquitin-activating enzymes (E1), ubiquitin-conjugating enzymes (E2), and ubiquitin-ligases (E3), to covalently attach ubiquitin with pervasive assembly possibilities, known as the ubiquitin code. As part of physiological homeostasis, ubiquitin is reversibly cleaved from proteins via deubiquitylating enzymes (DUBs) in a well-orchestrated process, altering the protein's fate. Among the DUBs, ubiquitin-specific protease 7 (USP7) is considered a pivotal member due to its role in regulating the stability of multiple proteins involved in various biological activities, including p53 stability, DNA damage response, transcription, epigenetics, immune response, and viral infection. However, overexpression of USP7 is involved in many tumors and viral infections, rendering USP7 a promising target for therapeutic intervention. This review provides a brief discussion of the USP7 structure, its biological functions, and its role in disease pathology. The development of USP7 inhibitors is systematically summarized, ranging from irreversible covalent inhibitors, such as thiophene, thiazole, and tetrahydroacridine derivatives, to FT827 and XL177A, to reversible non-covalent inhibitors, including derivatives of indeno[1,2-b]pyrazine, 2-aminopyridine, pyrimidinone, imidazopyridine, 7-pyridyl-2,3-dihydrobenzofuran, and tetrahydroquinoline bi-aryl. Also, natural products, USP7 degraders, and computational efforts were covered. Reported activities and SAR are highlighted to assist drug discovery scientists in rationalizing the subsequent generation of USP7 inhibitors.