Of all our organ systems, the gastrointestinal tract contains the highest levels of endogenous and exogenous proteases (also known as proteinases and peptidases); however, our understanding of their functions and interactions within the gastrointestinal tract is restricted largely to nutrient digestion. The gut epithelium is a sensor of the luminal environment, not only controlling digestive, absorptive and secretory functions, but also relaying information to the mucosal immune, vascular and nervous systems. These functions involve a complex array of cell types that elaborate growth factors, cytokines and extracellular matrix (ECM) proteins, the activity and availability of which are regulated by proteases. Proteolytic activity must be tightly regulated in the face of diverse environmental challenges, because unrestrained or excessive proteolysis leads to pathological gastrointestinal conditions. Moreover, enteric microbes and parasites can hijack proteolytic pathways through 'pathogen host mimicry'. Understanding how the protease balance is maintained and regulated in the intestinal epithelial cell microenvironment and how proteases contribute to physiological and pathological outcomes will undoubtedly contribute to the identification of new potential therapeutic targets for gastrointestinal diseases.