Neutrophils kill bacteria generally through oxidative and nonoxidative mechanisms. Whereas much research has focused on the enzymes essential for neutrophil killing, little is known about the regulatory molecules responsible for such killing. In this study, we investigated the role of olfactomedin 4 (OLFM4), an olfactomedin-related glycoprotein, in neutrophil bactericidal capability and host innate immunity. Neutrophils from OLFM4−/− mice have increased intracellular killing of Staphylococcus aureus and Escherichia coli in vitro. The OLFM4−/− mice have enhanced in vivo bacterial clearance and are more resistant to sepsis when challenged with S. aureus or E. coli by ip injection. OLFM4 was found to interact with cathepsin C, a cysteine protease that plays an important role in bacterial killing and immune regulation. We demonstrated that OLFM4 inhibited cathepsin C activity in vitro and in vivo. The cathepsin C activity in neutrophils from OLFM4−/− mice was significantly higher than that in neutrophils from wild-type littermate mice. The activities of three serine proteases (neutrophil elastase, cathepsin G, and proteinase 3), which require cathepsin C activity for processing and maturity, were also significantly higher in OLFM4−/− neutrophils. The bacterial killing and clearance capabilities observed in OLFM4−/− mice that were enhanced relative to wild-type mice were significantly compromised by the additional loss of cathepsin C in mice with OLFM4 and cathepsin C double deficiency. These results indicate that OLFM4 is an important negative regulator of neutrophil bactericidal activity by restricting cathepsin C activity and its downstream granule-associated serine proteases.