Pathogenic variants in the ubiquitin-specific protease 7 (USP7) gene cause a neurodevelopmental disorder called Hao-Fountain syndrome. However, which of its pleiotropic substrates are relevant for neurodevelopment is undetermined. Here, we present a combination of quantitative proteomics, transcriptomics and epigenomics to define the USP7 regulatory circuitry during neurodifferentiation. USP7 activity is required for the transcriptional programs that direct differentiation of embryonic stem cells to neural stem cells, and neuronal differentiation of SHSY5Y neuroblastoma cells. USP7 controls the dosage of the Polycomb H2AK119ub1 ubiquitin ligases ncPRC1.1 and ncPRC1.6. Loss-of-function experiments revealed that BCOR-ncPRC1.1, but not ncPRC1.6, is a key effector of USP7-dependent neuronal differentiation. Indeed, BCOR-ncPRC1.1 mediates the majority of USP7-dependent gene regulation during this process. Besides providing a detailed map of the USP7 regulome during neurodifferentiation, our results suggest that USP7- and ncPRC1.1-associated neurodevelopmental disorders involve dysregulation of a common epigenetic network.