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OTUD1 is a deubiquitinase of the OTU family that participates in immune signaling, redox balance, and cell death through modulating substrate ubiquitination. Under physiological conditions, OTUD1 primarily exerts negative regulatory effects, restricting excessive activation of NF-κB inflammatory signaling and type I interferon responses, thereby maintaining immune and oxidative homeostasis. Under pathological conditions, its functional effects undergo tissue-dependent reprogramming: it is downregulated in most epithelial tumors and suppresses malignant progression, whereas it is upregulated in certain tumors and cardiovascular or metabolic diseases and promotes pathological remodeling. It exerts protective regulation in the nervous system and mucosal inflammation, yet drives hypertrophy and fibrosis in the cardiovascular system. Preclinical studies indicate that OTUD1 expression levels correlate with tumor stage, prognosis, and therapeutic sensitivity, suggesting potential as a biomarker for diagnostic subtyping and prognostic assessment. However, marked tissue functional heterogeneity, the discovery of non-enzymatic scaffold functions, and the lack of highly selective targeting probes constitute central bottlenecks for clinical translation. This review systematically summarizes the molecular characteristics, physiological functions, disease regulatory networks, and current clinical translational status of OTUD1, with the aim of clarifying the molecular basis of its functional duality and providing a theoretical foundation for optimizing precision diagnostic and therapeutic strategies targeting OTUD1.