The pituitary hormones adrenocorticotropic hormone (ACTH), beta-endorphin, and alpha-melanocyte stimulating hormone (alpha-MSH) are synthesized by proteolytic processing of their common proopiomelanocortin (POMC) precursor. Key findings from this study show that cathepsin L functions as a major proteolytic enzyme for the production of POMC-derived peptide hormones in secretory vesicles. Specifically, cathepsin L knock-out mice showed major decreases in ACTH, beta-endorphin, and alpha-MSH that were reduced to 23, 18, and 7% of wild-type controls (100%) in pituitary. These decreased peptide levels were accompanied by increased levels of POMC consistent with proteolysis of POMC by cathepsin L. Immunofluorescence microscopy showed colocalization of cathepsin L with beta-endorphin and alpha-MSH in the intermediate pituitary and with ACTH in the anterior pituitary. In contrast, cathepsin L was only partially colocalized with the lysosomal marker Lamp-1 in pituitary, consistent with its extralysosomal function in secretory vesicles. Expression of cathepsin L in pituitary AtT-20 cells resulted in increased ACTH and beta-endorphin in the regulated secretory pathway. Furthermore, treatment of AtT-20 cells with CLIK-148, a specific inhibitor of cathepsin L, resulted in reduced production of ACTH and accumulation of POMC. These findings demonstrate a prominent role for cathepsin L in the production of ACTH, beta-endorphin, and alpha-MSH peptide hormones in the regulated secretory pathway.