β‐catenin is a key signal transducer in the canonical WNT pathway and is negatively regulated by ubiquitin‐dependent proteolysis. Through screening of various deubiquitinating enzymes (DUBs), we identified ubiquitin specific protease 4 (USP4) as a candidate for β‐catenin‐specific DUB. The effects of USP4 overexpression or knockdown suggested that USP4 positively controls the stability of β‐catenin and enhances β‐catenin‐regulated transcription. Domain mapping results revealed that the C‐terminal catalytic domain is responsible for β‐catenin binding and nuclear transport. Examination of colon cancer tissues from patients revealed a correlation between elevated expression levels of USP4 and β‐catenin. Consistent with this correlation, USP4 knockdown in HCT116, a colon cancer cell line, reduced invasion and migration activity. These observations indicate that USP4 acts as a positive regulator of the WNT/β‐catenin pathway by deubiquitination and facilitates nuclear localization of β‐catenin. Therefore, we propose that USP4 is a potential target for anti‐cancer therapeutics.