Testis-specific protein Y-linked 1 (TSPY1) is expressed predominantly in adult human spermatogonia and functions in the process of spermatogenesis; however, our understanding of the underlying mechanism is limited. Here we observed that TSPY1, as an interacting partner of TSPY-like 5 (TSPYL5), enhanced the competitive binding of TSPYL5 to ubiquitin-specific peptidase 7 (USP7) in conjunction with p53. This activity, together with its promotion of TSPYL5 expression by acting as a transcription factor, resulted in increased p53 ubiquitylation. Moreover, TSPY1 could decrease the p53 level by inducing the degradation of ubiquitinated USP7. We demonstrated that the promotion of p53 degradation by TSPY1 influenced the activity of p53 target molecules (CDK1, p21, and BAX) to expedite the G2/M phase transition and decrease cell apoptosis, accelerating cell proliferation. Taken together, the observations reveal the significance of TSPY1 as a suppressor of USP7-mediated p53 function in inhibiting p53-dependent cell proliferation arrest. By simulating TSPY1 function in Tspy1-deficient spermatogonia derived from mouse testes, we found that TSPY1 could promote spermatogonial proliferation by decreasing the Usp7-modulated p53 level. The findings suggest an additional mechanism underlying the regulation of spermatogonial p53 function, indicating the significance of TSPY1 in germline homeostasis maintenance and the potential of TSPY1 in regulating human spermatogonial proliferation via the USP7-mediated p53 signaling pathway.