Ubiquitin-specific peptidase 7 (USP7) is a deubiquitinating enzyme that mediates the stability and activity of numerous proteins. At basal expression levels, USP7 stabilizes p53 protein, even in the presence of excess MDM2. However, its overexpression leads to the deubiquitination of MDM2 at a rate faster than p53, leading to p53 degradation and pro-tumorigenic roles. Consequently, it is an attractive target for anticancer drug discovery via the modulation of its allosteric site from which the protein is activated. In this study, molecular modeling techniques and cheminformatics approaches were employed to unravel the potential of eighty compounds to serve as its allosteric site modulators. The compounds were initially subjected to virtual screening. Subsequently, the binding free energies of the top four compounds with the highest binding affinities were calculated, and their drug-likeness, and pharmacokinetic and toxicity profiles were evaluated. Ultimately, the complexes of the protein and hit compounds were subjected to a 100 nanoseconds (ns) molecular dynamics simulation. The results of the study revealed eight compounds from the compound library with docking scores ranging from − 7.491 to -11.43 kcal/mol, compared to P217564, which exhibited a docking score of -5.671 kcal/mol. The top four compounds with the highest affinities possessed drug-like properties, and good pharmacokinetic and toxicity profiles, and their predicted inhibitory potentials showed they will be effective at minimal concentration. Also, molecular dynamics simulation confirmed the stability of the protein-ligand complexes. Conclusively, the compounds identified in this study are worthy of further evaluation for the development of allosteric site modulators of USP7.