The oligomeric structure and the residual propeptide are distinct characteristics of cathepsin C from other members in the papain superfamily. In this study, we examined the physiological role of the cathepsin C propeptide. The stable overexpression of cathepsin C propeptide significantly decreased the activities of intestinal alkaline phosphatase (IAP) and sucrase in human Caco-2 intestinal epithelial cells, whereas it did not change the proliferation and cathepsin C activity. The overexpression of cathepsin C propeptide significantly decreased the amounts of IAP protein in differentiated Caco-2 cells, compared with the transfection of mock vector, whereas the amounts of IAP transcripts were not changed. Pulse-chase analysis confirmed that the reduction in IAP activity was due to an increase in IAP degradation, but not a decrease in IAP expression. For the mechanism of the enhanced IAP degradation, we identified proteins interacting with cathepsin C propeptide in Caco-2 cells by immunoprecipitation and mass spectrometry. Cathepsin C propeptide interacted with proteins with a molecular mass of approximately 70 kDa, including IAP and heat shock cognate protein 70. Our present results suggest that the propeptide of cathepsin C may stimulate the sorting to the lysosome, at least in part, contributing to the degradation of IAP in Caco-2 cells.