Cathepsin D (CTSD) is a lysosomal protease and a marker of poor prognosis in breast cancer. However, the cells responsible for this association and the function of CTSD in cancer are still incompletely understood. By using a conditional CTSD knockout mouse crossed to the transgenic MMTV-PyMT breast cancer model we demonstrate that CTSD deficiency in the mammary epithelium, but not in myeloid cells, blocked tumor development in a cell-autonomous manner. We show that lack of CTSD impaired mechanistic Target of Rapamycin Complex 1 (mTORC1) signaling and induced reversible cellular quiescence. In line, CTSD-deficient tumors started to grow with a two-month delay and quiescent Ctsd-/- tumor cells re-started proliferation upon long-term culture. This was accompanied by rewiring of oncogenic gene expression and signaling pathways, while mTORC1 signaling remained permanently disabled in CTSD-deficient cells. Together, these studies reveal a tumor cell-autonomous effect of CTSD deficiency, and establish a pivotal role of this protease in the cellular response to oncogenic stimuli.