The subclass of cysteine proteases termed lysosomal cathepsins has long been thought to be primarily involved in end-stage protein breakdown within lysosomal compartments. Furthermore, few specific protein substrates for these proteases have been identified. We show here that cathepsin L functions in the regulation of cell cycle progression through proteolytic processing of the CDP/Cux transcription factor. CDP/Cux processing in situ was increased following ectopic expression of cathepsin L but was reduced in Cat L^−/− cells. Furthermore, catalytically active cathepsin L was localized to the nucleus during the G1-S transition as detected by immunofluorescence imaging and labeling using activity-based probes. Trafficking of cathepsin L to the nucleus is accomplished through a mechanism involving translation initiation at downstream AUG sites and the synthesis of proteases that are devoid of a signal peptide. Overall, these results uncover an as yet unsuspected role for cysteine proteases in the control of cell cycle progression.