Derangements in protein homeostasis and associated proteotoxicity mark acute, chronic, and drug-induced hepatocellular injury. Metabolic dysfunction-associated proteasomal inhibition and the use of proteasome inhibitors often underlie such pathological hepatic proteotoxicity. In this study, we sought to identify a candidate deubiquitinating enzyme (DUB) responsible for reversing the proteotoxic damage. To this end, we performed a siRNA screening wherein 96 DUBs were individually knocked down in HepG2 cells under proteasomal inhibitor-induced stress for dual readouts, apoptosis, and cell viability. Among the putative hits, we chose JOSD1, a member of the Machado-Josephin family of DUBs that reciprocally increased cell viability and decreased cell death under proteotoxicity. JOSD1-mediated mitigation of proteotoxicity was further validated in primary mouse hepatocytes by gain and loss of function studies. Marked plasma membrane accumulation of monoubiquitinated JOSD1 in proteotoxic conditions is a prerequisite for its protective role, while the enzymatically inactive JOSD1 C36A mutant was conversely polyubiquitinated, does not have membrane localisation and fails to reverse proteotoxicity. Mechanistically, JOSD1 physically interacts with the suppressor of cytokine signalling 1 (SOCS1), deubiquitinates it and enhances its stability under proteotoxic stress. Indeed, SOCS1 expression is necessary and sufficient for the hepatoprotective function of JOSD1 under proteasomal inhibition. In vivo, adenovirus-mediated ectopic expression or depletion of JOSD1 in mice liver respectively protects or aggravates hepatic injury when challenged with proteasome blocker Bortezomib. Our study thus unveils JOSD1 as a potential candidate for ameliorating hepatocellular damage in liver diseases.