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Summary: The USP7 deubiquitinase regulates proteins involved in the cell cycle, DNA repair, and epigenetics and has been implicated in cancer progression. USP7 inhibition has been pursued for the development of anti-cancer therapies. Here, we describe the discovery of potent and specific USP7 inhibitors exemplified by FX1-5303. FX1-5303 was used as a chemical probe to study the USP7-mediated regulation of p53 signaling in cells. It demonstrates mechanistic differences compared to MDM2 antagonists, a related class of anti-tumor agents that act along the same pathway. FX1-5303 synergizes with the clinically approved BCL2 inhibitor venetoclax in acute myeloid leukemia (AML) cell lines and ex vivo patient samples and leads to strong tumor growth inhibition in in vivo mouse xenograft models of multiple myeloma and AML. This work introduces new USP7 inhibitors, differentiates their mechanism of action from MDM2 inhibition, and identifies specific opportunities for their use in the treatment of AML.