The ERK1/2 (also known as MAPK3 and MAPK1, respectively) signaling pathway is critical in organismal development and tissue morphogenesis. Deregulation of this pathway leads to congenital abnormalities with severe developmental dysmorphisms. The core ERK1/2 cascade relies on scaffold proteins, such as Shoc2 to guide and fine-tune its signals. Mutations in SHOC2 lead to the development of the pathology termed Noonan-like Syndrome with Loose Anagen Hair (NSLAH). However, the mechanisms underlying the functions of Shoc2 and its contributions to disease progression remain unclear. Here, we show that ERK1/2 pathway activation triggers the interaction of Shoc2 with the ubiquitin-specific protease USP7. We reveal that, in the Shoc2 module, USP7 functions as a molecular 'switch' that controls the E3 ligase HUWE1 and the HUWE1-induced regulatory feedback loop. We also demonstrate that disruption of Shoc2-USP7 binding leads to aberrant activation of the Shoc2-ERK1/2 axis. Importantly, our studies reveal a possible role for USP7 in the pathogenic mechanisms underlying NSLAH, thereby extending our understanding of how ubiquitin-specific proteases regulate intracellular signaling.