Fbw7, the substrate recognition subunit of SCF(Fbw7) ubiquitin ligase, mediates the turnover of multiple proto-oncoproteins and promotes its own degradation. Fbw7-dependent substrate ubiquitination is antagonized by the Usp28 deubiquitinase. Here, we show that Usp28 preferentially antagonizes autocatalytic ubiquitination and stabilizes Fbw7, resulting in dose-dependent effects in Usp28 knockout mice. Monoallelic deletion of Usp28 maintains stable Fbw7 but drives Fbw7 substrate degradation. In contrast, complete knockout triggers Fbw7 degradation and leads to the accumulation of Fbw7 substrates in several tissues and embryonic fibroblasts. On the other hand, overexpression of Usp28 stabilizes both Fbw7 and its substrates. Consequently, both complete loss and ectopic expression of Usp28 promote Ras-driven oncogenic transformation. We propose that dual regulation of Fbw7 activity by Usp28 is a safeguard mechanism for maintaining physiological levels of proto-oncogenic Fbw7 substrates, which is equivalently disrupted by loss or overexpression of Usp28.