The lysosomal cysteine peptidases cathepsin B and cathepsin L are abundant and ubiquitously expressed members of the papain family, and both enzymes contribute to the terminal degradation of proteins in the lysosome. However, there is accumulating evidence for specific functions of lysosomal proteases in health and disease. The generation of 'knock out' mouse strains that are deficient in lysosomal proteases provides a valuable tool for evaluation of existing hypotheses and gaining new insights into the in vivo functions of these proteases. In this minireview, we summarise and discuss the findings obtained by analysis of mice that are devoid of cathepsin B or cathepsin L. In brief, cathepsin L appears to be critically involved in epidermal homeostasis, regulation of the hair cycle, and MHC class II-mediated antigen presentation in cortical epithelial cells of the thymus. Cathepsin B plays a major role in pathological trypsinogen activation in the early course of experimental pancreatitis and contributes significantly to TNF-alpha induced hepatocyte apoptosis.