USP7, a deubiquitylating enzyme hydrolyzing the isopeptide bond at the C-terminus of ubiquitin, is an emerging cancer target. We isolated spongiacidin C from the marine sponge Stylissa massa as the first USP7 inhibitor from a natural source. This compound inhibited USP7 most strongly with an IC50 of 3.8 μM among several USP family members tested.