Disturbance in a differentiation program of skeletal stem cells leads to indecorous skeletogenesis. Growing evidence suggests that a fine-tuning of ubiquitin-mediated protein degradation is crucial for skeletal stem cells to maintain their stemness and osteogenic potential. Here, we demonstrate that the deubiquitinating enzyme (DUB) ubiquitin-specific protease 8 (USP8) stabilizes the Wnt receptor frizzled 5 (FZD5) by preventing its lysosomal degradation. This pathway is essential for Wnt/β-catenin signaling and the differentiation of osteoprogenitors to mature osteoblasts. Accordingly, deletion of USP8 in osteoprogenitors (Usp8Osx) resulted in a near-complete blockade in skeletal mineralization, similar to that seen in mice with defective Wnt/β-catenin signaling. Likewise, transplanting USP8-deficient osteoprogenitors under the renal capsule in wild-type secondary hosts did not to induce bone formation. Collectively, this study unveils an essential role for the DUB USP8 in Wnt/β-catenin signaling in osteoprogenitors and osteogenesis during skeletal development.