AbstractTGF‐β signaling is a key player in tumor progression and immune evasion, and is associated with poor response to cancer immunotherapies. Here, we identified ubiquitin‐specific peptidase 8 (USP8) as a metastasis enhancer and a highly active deubiquitinase in aggressive breast tumors. USP8 acts both as a cancer stemness‐promoting factor and an activator of the TGF‐β/SMAD signaling pathway. USP8 directly deubiquitinates and stabilizes the type II TGF‐β receptor TβRII, leading to its increased expression in the plasma membrane and in tumor‐derived extracellular vesicles (TEVs). Increased USP8 activity was observed in patients resistant to neoadjuvant chemotherapies. USP8 promotes TGF‐β/SMAD‐induced epithelial‐mesenchymal transition (EMT), invasion, and metastasis in tumor cells. USP8 expression also enables TβRII+ circulating extracellular vesicles (crEVs) to induce T cell exhaustion and chemoimmunotherapy resistance. Pharmacological inhibition of USP8 antagonizes TGF‐β/SMAD signaling, and reduces TβRII stability and the number of TβRII+ crEVs to prevent CD8+ T cell exhaustion and to reactivate anti‐tumor immunity. Our findings not only reveal a novel mechanism whereby USP8 regulates the cancer microenvironment but also demonstrate the therapeutic advantages of engineering USP8 inhibitors to simultaneously suppress metastasis and improve the efficacy of cancer immunotherapy.