The paramount importance of the homeostasis of the extracellular matrix for pulmonary function is exemplified by two opposing extremes: emphysema and pulmonary fibrosis. This study examined the putative role of cathepsin K (catK) in the pathology of lung fibrosis in mice and its relevance to the human disease activity. We compared the induction of lung fibrosis by administration of bleomycin. CTSK^−/− mice deposited significantly more extracellular matrix than control mice. Primary lung fibroblasts derived from CTSK^−/− mice showed a decreased collagenolytic activity indicating the role of catK in collagen degradation. Interestingly, CTSK^+/+ control mice revealed an increased expression of catK in fibrotic lung regions suggesting a protective role of catK to counter the excessive deposition of collagen matrix in the diseased lung. Similarly, in lung specimens obtained from patients with lung fibrosis fibroblasts expressed larger amounts of catK than those obtained from normal lungs. Activation of human pulmonary fibroblasts in primary cell cultures led to an increased activity of catK through enhanced gene transcription and protein expression and to increased intracellular collagenolytic activity. We believe that this is the first study to show that catK plays a pivotal role in lung matrix homeostasis under physiological and pathological conditions.