Ubiquitin-specific protease 7 (USP7) regulates various cellular pathways through its deubiquitination activity. Despite the identification of a growing number of substrates of USP7, the molecular mechanism by which USP7 removes ubiquitin chains from polyubiquitinated substrates remains unexplored. The present study investigated the mechanism underlying the deubiquitination of Lys63-linked polyubiquitinated proliferating cell nuclear antigen (PCNA). Biochemical analyses demonstrated that USP7 efficiently removes polyubiquitin chains from polyubiquitinated PCNA by preferential cleavage of the PCNA-ubiquitin linkage. This property was largely attributed to the poor activity toward Lys63-linked ubiquitin chains. The preferential cleavage of substrate-ubiquitin linkages was also observed for Lys48-linked polyubiquitinated p53 because of the inefficient cleavage of the Lys48-linked ubiquitin chains. The present findings suggest a mechanism underlying the removal of polyubiquitin signals by USP7.