Post-translational histone modifications play important roles in regulating gene expression programs, which in turn determine cell fate and lineage commitment during development. One such modification is histone ubiquitination, which primarily targets histone H2A and H2B. Although ubiquitination of H2A and H2B has been generally linked to gene silencing and gene activation, respectively, the functions of histone ubiquitination during eukaryote development are not well understood. Here, we identified USP12 and USP46 as histone H2A and H2B deubiquitinases that regulate Xenopus development. USP12 and USP46 prefer nucleosomal substrates and deubiquitinate both histone H2A and H2B in vitro and in vivo. WDR48, a WD40 repeat-containing protein, interacts with USP12 and USP46 and is required for the histone deubiquitination activity. Overexpression of either gene leads to gastrulation defects without affecting mesodermal cell fate, whereas knockdown of USP12 in Xenopus embryos results in reduction of a subset of mesodermal genes at gastrula stages. Immunohistochemical staining and chromatin immunoprecipitation assays revealed that USP12 regulates histone deubiquitination in the mesoderm and at specific gene promoters during Xenopus development. Taken together, this study identifies USP12 and USP46 as histone deubiquitinases for H2A and H2B and reveals that USP12 regulates Xenopus development during gastrula stages.