Cathepsin K, a cysteine protease of the papain family, was identified by sequencing complementary DNA libraries derived from osteoclasts. Cathepsin K can cleave bone proteins such as Type I collagen, osteopontin, and osteonectin. The localization and maturation of cathepsin K in activated osteoclasts have been characterized. Furthermore, mutation of the gene expressing cathepsin K in humans results in pycnodysostosis, an autosomal recessive condition, resulting in osteoprosis and increased bone fragility. Knockout of cathepsin K in the mouse also results in retarded bone matrix degradation and osteopetrosis. Together, these data demonstrate that inhibition of cathepsin K should result in a dimunition of osteoclast-mediated bone resorption. Several novel classes of cathepsin K inhibitors have been designed from X-ray co-crystal structures of peptide aldehydes bound to papain. The convergence of the design of novel inhibitors and the discovery of cathepsin K has created opportunities to further understand bone and cartilage biology as well as provide new therapeutic agents for the treatment of disease states in man such as osteoporosis.