ABSTRACT Our prior investigation has demonstrated that ID3 modulates PD‐L1, thereby affecting immune evasion in colorectal cancer (CRC). Nonetheless, the regulatory mechanisms of ID3, particularly those involving its ubiquitination and degradation, remain inadequately understood. In this study, we identify USP35 as a deubiquitinating enzyme for ID3, which stabilizes ID3 by targeting the N‐terminal lysine residues K2 and K30, thus inhibiting its ubiquitination and degradation. This stabilization enhances ID3's transcriptional activity, resulting in elevated PD‐L1 expression in CRC and facilitating immune escape. Furthermore, we discover an effective inhibitor of USP35 enzyme activity, IU1, which directly suppresses ID3 expression by promoting its ubiquitination and subsequently reducing PD‐L1 expression. IU1 not only impedes tumor cell proliferation, but also augments the efficacy of PD‐L1 monoclonal antibody therapy by enhancing anti‐tumor immune responses. These findings elucidate a novel mechanism by which the USP35‐ID3‐PD‐L1 axis contributes to immune evasion in CRC and propose a potential therapeutic strategy to improve the efficacy of immunotherapy in CRC patients.