The balance between inflammatory T helper type 17 (Th17) and immunosuppressive regulatory T (Treg) cells is critical for maintaining immune homeostasis in the human body and is tightly regulated under healthy conditions. An increasing number of studies have reported that deubiquitinases (DUBs) play a vital role in regulating Th17- and Treg-cell differentiation. However, the biological functions of only a small fraction of DUBs in Th17- and Treg-cell differentiation are well defined. In this study, we identified ubiquitin-specific peptidase 1 (USP1) as a vital regulator of CD4⁺ T-cell differentiation. USP1 promoted Th17-cell differentiation but attenuated Treg-cell differentiation, thereby promoting the development of inflammatory diseases. Mechanistically, USP1 in CD4⁺ T cells enhanced the activity of RORγt but promoted the proteasomal degradation of Foxp3 through deubiquitination and stabilization of TAZ in vitro and in vivo. Notably, ML323, a specific inhibitor of the USP1/UAF1 deubiquitinase complex, inhibited Th17-cell differentiation and promoted Treg-cell differentiation in vitro and in vivo, indicating that ML323 might be a promising candidate for the treatment of diseases associated with an imbalance between Th17 and Treg cells. Our study highlights the critical role of USP1 in regulating adaptive immune responses and suggests that USP1 might be a drug target for the treatment of diseases associated with an imbalance between Th17 and Treg cells.