Giardia lamblia is a protozoan parasite and the earliest branching clade of eukaryota. The Giardia life cycle alternates between an asexually replicating vegetative form and an infectious cyst form. Encystation and excystation are crucial processes for the survival and transmission of Giardia. Cysteine proteases in Giardia have been implicated in proteolytic processing events that enable the continuance of the life cycle throughout encystation and excystation. Using quantitative real-time PCR, the expression of twenty-seven clan CA cysteine protease genes in the Giardia genome was measured during both vegetative growth and encystation. Giardia cysteine protease 2 was the most highly expressed cysteine protease during both life cycle stages measured, with a dramatic expression increase during encystation. The mRNA transcript for Giardia cysteine protease 2 was 7-fold up-regulated during encystation and was greater than 3-fold higher than any other Giardia protease gene product. Recombinant Giardia cysteine protease 2 was expressed, purified, and biochemically characterized. The activity of the recombinant cysteine protease 2 protein was confirmed to be identical to the dominant cysteine protease activity found in G. lamblia lysates. Giardia cysteine protease 2 was co-localized with cyst wall protein in encystation-specific vesicles during encystation and processed cyst wall protein 2 to the size found in Giardia cyst walls. These data suggest that Giardia cysteine protease 2 is not only the major cysteine endoprotease expressed in Giardia, but is also central to the encystation process.