In transformed mouse fibroblasts, a significant proportion of the lysosomal cysteine protease cathepsin L remains in cells as an inactive precursor which associates with membranes by a mannose phosphate‐independent interaction. When microsomes prepared from these cells were resolved on sucrose gradients, this procathepsin L was localized in dense vesicles distinct from those enriched for growth hormone, which is secreted constitutively when expressed in fibroblasts. Ultrastructural studies using antibodies directed against the propeptide to avoid detection of the mature enzyme in lysosomes revealed that the proenzyme was concentrated in dense cores within small vesicles and multivesicular endosomes which labeled with antibodies specific for CD63. Consistent with the resemblance of these cores to those of regulated secretory granules, secretion of procathepsin L from fibroblasts was modestly stimulated by phorbol, 12‐myristate, 13‐acetate. When protein synthesis was blocked with cycloheximide and lysosomal proteolysis inhibited with leupeptin, procathepsin L was found to gradually convert to the active single‐chain protease. The data suggest that when synthesis levels are high, a portion of the procathepsin L is packaged in dense cores within multivesicular endosomes localized near the plasma membrane. Gradual activation of this proenzyme achieves targeting of the proenzyme to lysosomes by a mannose phosphate receptor‐independent pathway.