Cathepsin K is a member of the papain superfamily of cysteine proteases and has been proposed to play a pivotal role in osteoclast-mediated bone resorption. We have developed a sensitive cytochemical assay to localize and quantify osteoclast cathepsin K activity in sections of osteoclastoma and human bone. In tissue sections, osteoclasts that are distant from bone express high levels of cathepsin K messenger RNA (mRNA) and protein. However, the majority of the cathepsin K in these cells is in an inactive zymogen form, as assessed using both the cytochemical assay and specific immunostaining. In contrast, osteoclasts that are closer to bone contain high levels of immunoreactive mature cathepsin K that codistributes with enzyme activity in a polarized fashion toward the bone surface. Polarization of active enzyme was clearly evident in osteoclasts in the vicinity of bone. The osteoclasts apposed to the bone surface were almost exclusively expressing the mature form of cathepsin K. These cells showed intense enzyme activity, which was polarized at the ruffled border. These results suggest that the in vivo activation of cathepsin K occurs intracellularly, before secretion into the resorption lacunae and the onset of bone resorption. The processing of procathepsin K to mature cathepsin K occurs as the osteoclast approaches bone, suggesting that local factors may regulate this process.