Ubiquitin specific peptidase 7 (USP7) is a deubiquitinating enzyme (DUB) that removes ubiquitin tags from specific target protein substrates in order to alter their degradation rate, sub-cellular localization, interaction, and activity. The induction of apoptosis upon USP7 inhibition is well established in cancer containing wild type p53, which operates through the 'USP7-Mdm2-p53' axis. However, in cancers without functional p53, USP7-dependent apoptosis is induced through many other alternative pathways. Here, we have identified another critical p53 independent path active under USP7 to regulate apoptosis. Proteomics analysis identifies XIAP as a potential target of USP7-dependent deubiquitination. GSEA analysis revealed up-regulation of apoptosis signalling upon USP7 inhibition associated with XIAP down-regulation. Modulation of USP7 expression and activity in multiple cancer cell lines showed that USP7 deubiquitinates XIAP to inhibit apoptosis in a caspase-dependent pathway, and the combinatorial inhibition of USP7 and XIAP induces apoptosis in vitro and in vivo. Immunohistochemical staining revealed that grade-wise accumulation of USP7 correlated with an elevated level of XIAP in glioma tissue. This is the first report on the identification and validation of XIAP as a novel substrate of USP7 and together, they involve in the empowerment of the tumorigenic potential of cancer cells by inhibiting apoptosis.