Metabolic dysfunction-associated fatty liver disease (MASLD) is a chronic liver disease characterized by hepatic steatosis. Ubiquitin-specific proteinase 29 (USP29) plays pivotal roles in hepatic ischemia‒reperfusion injury and hepatocellular carcinoma, but its role in MASLD remains unexplored. Therefore, the aim of this study was to reveal the effects and underlying mechanisms of USP29 in MASLD progression. USP29 expression was assessed in liver samples from MASLD patients and mice. The role and molecular mechanism of USP29 in MASLD were assessed in high-fat diet-fed and high-fat/high-cholesterol diet-fed mice and palmitic acid and oleic acid treated hepatocytes. USP29 protein levels were significantly reduced in mice and humans with MASLD. Hepatic steatosis, inflammation and fibrosis were significantly exacerbated by USP29 deletion and relieved by USP29 overexpression. Mechanistically, USP29 significantly activated the expression of genes related to fatty acid β-oxidation (FAO) under metabolic stimulation, directly interacted with Acyl-CoA synthetase long chain family member 5 (ACSL5) and repressed ACSL5 degradation by increasing ACSL5 K48-linked deubiquitination. Moreover, the effect of USP29 on hepatocyte lipid accumulation and MASLD was dependent on ACSL5. USP29 functions as a novel negative regulator of MASLD by stabilizing ACSL5 to promote FAO. The activation of the USP29-ACSL5 axis may represent a potential therapeutic strategy for MASLD.