Ubiquitin carboxyl terminal hydrolase L3 (UCHL3) is a deubiquitinase belonging to UCH protease family. Previous studies have demonstrated that abnormal expression of UCHL3 is correlated with the development of human diseases, especially in tumors. Notably, UCHL3 exhibits contradictory biological functions across different cancer types. Initial studies identified UCHL3 as a tumor suppressor in prostate cancer. However, emerging evidence suggests that UCHL3 serves as an oncogene in other cancers. Several UCHL3 inhibitors have shown a promising anti-tumor effect in vitro and in vivo. UCHL3 has also been linked to DNA damage repair, which is essential for genome stability. Overexpression of UCHL3 enhances DNA damage repair induced resistance to chemotherapy or radiotherapy in certain tumor types. This review aims to summarize the promoting role of UCHL3 in DNA damage repair and its dual, paradoxical roles in tumor progression, along with the associated mechanisms, and to provide insights into the use of UCHL3 as a therapeutic target for overcoming DNA damage repair-mediated resistance to chemotherapy and radiotherapy, as well as for treating tumors.