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Abstract Background Hepatocellular carcinoma (HCC) remains a medical challenge due to its high proliferation and metastasis. Although deubiquitinating enzymes (DUBs) play a key role in regulating protein degradation, their pathological roles in HCC have not been fully elucidated. Methods By using biomass spectrometry, co-immunoprecipitation, western blotting and immunofluorescence assays, we identify ribosomal protein S16 (RPS16) as a key substrate of ubiquitin-specific peptidase 1 (USP1). The role of USP1-RPS16 axis in the progression of HCC was evaluated in cell cultures, in xenograft mouse models, and in clinical observations. Results We show that USP1 interacts with RPS16. The depletion of USP1 increases the level of K48-linked ubiquitinated-RPS16, leading to proteasome-dependent RPS16 degradation. In contrast, overexpression of USP1-WT instead of USP1-C90A (DUB inactivation mutant) reduces the level of K48-linked ubiquitinated RPS16, thereby stabilizing RPS16. Consequently, USP1 depletion mimics RPS16 deficiency with respect to the inhibition of growth and metastasis, whereas transfection-enforced re-expression of RPS16 restores oncogenic-like activity in USP1-deficient HCC cells. Importantly, the high expression of USP1 and RPS16 in liver tissue is a prognostic factor for poor survival of HCC patients. Conclusions These findings reveal a previously unrecognized role for the activation of USP1-RPS16 pathway in driving HCC, which may be further developed as a novel strategy for cancer treatment.