The immune system detects viral infections and mutations in parenchymal cells when antigens from these cells are crosspresented on MHC class I molecules of professional antigen-presenting cells (APC). Exogenous antigens are crosspresented through TAP-dependent (cytosolic) or poorly understood TAP-independent (vacuolar) pathways. The TAP-independent pathway is blocked by the cysteine protease inhibitor, leupeptin, but not by proteasome inhibitors, which is opposite to the effects of these agents on the TAP-dependent pathway. Dendritic cells lacking the cysteine protease cathepsin S lack the TAP-independent pathway. Mice whose APC lack cathepsin S have reduced crosspriming to particulate and cell-associated antigens, as well as to influenza virus. Cathepsin S-deficient phagosomes generate a class I-presented peptide poorly. In contrast, cathepsin S-sufficient phagosomes and recombinant cathepsin S produce the mature epitope. Therefore, cathepsin S plays a major role in generating presented peptides for the vacuolar pathway of crosspresentation, and this mechanism is active in vivo.