During chronic kidney disease (CKD) there is a dysregulation of extracellular matrix (ECM) homeostasis leading to renal fibrosis. Lysosomal proteases such as cathepsins (Cts) regulate this process in other organs, however, their role in CKD is still unknown. Here we describe a novel role for cathepsins in CKD. CtsD and B were located in distal and proximal tubular cells respectively in human disease. Administration of CtsD (Pepstatin A) but not B inhibitor (Ca074-Me), in two mouse CKD models, UUO and chronic ischemia reperfusion injury, led to a reduction in fibrosis. No changes in collagen transcription or myofibroblasts numbers were observed. Pepstatin A administration resulted in increased extracellular urokinase and collagen degradation. In vitro and in vivo administration of chloroquine, an endo/lysosomal inhibitor, mimicked Pepstatin A effect on renal fibrosis. Therefore, we propose a mechanism by which CtsD inhibition leads to increased collagenolytic activity due to an impairment in lysosomal recycling. This results in increased extracellular activity of enzymes such as urokinase, triggering a proteolytic cascade, which culminates in more ECM degradation. Taken together these results suggest that inhibition of lysosomal proteases, such as CtsD, could be a new therapeutic approach to reduce renal fibrosis and slow progression of CKD.