Post-translational modification of proteins by ubiquitin (UQ) and UQ-like modifiers is emerging as a central pathway in DNA replication. We previously showed that chromatin in the vicinity of replisomes is rich in SUMO and depleted in UQ, whereas an opposite pattern is observed in mature chromatin. How this SUMO-rich/UQ-low environment is maintained at replisomes is not known. Here we identify USP7 as a SUMO deubiquitinase that localizes to replication forks and is essential for DNA replication. By acting on SUMO and SUMOylated proteins, USP7 prevents their ubiquitination. Chemical inhibition or genetic deletion of USP7 leads to the accumulation of UQ on SUMOylated proteins, which are displaced from the replisomes. Our findings provide a model to explain the differential accumulation of SUMO and UQ in replication forks versus mature chromatin, and identify an essential role of USP7 that should be taken into account for the use of USP7 inhibitors as anticancer agents.