Proteolysis by endocytic cysteine proteases is a central element of the antigen-presentation machinery in dendritic cells (DC). It controls the generation of immunogenic peptides, guides the transit of both MHC class II and MHC-like molecules through the endocytic compartment and converts class II into a peptide-receptive state - features closely linked to DC maturation. Differential activity of endocytic proteases, in particular cathepsins, in subcellular compartments has been implicated as a key regulatory element in controlling this machinery in murine DC. We analyzed the expression and subcellular distribution of the major endocytic cysteine proteases (cathepsins S, B, L and H) along with their major endogenous inhibitor, Cystatin C, in resting and stimulated human DC. Although the majority of cathepsin activity was restricted to lysosomes in resting DC, cathepsins selectively accumulated in late endosomes after LPS-induced stimulation. Surprisingly, expression and distribution of Cystatin C was unaffected by DC maturation. Thus, late endosomes represent a specialized compartment where proteolytic activity is developmentally regulated in DC. This could facilitate the conversion of exogenous protein into MHC class II-peptide complexes.