It is well established that dendritic cells (DCs) take up, process, and present lipid Ags in complex with CD1d molecules to invariant NKT cells. The lipid-activated transcription factor, peroxisome proliferator-activated receptor γ (PPARγ), has previously been shown to regulate CD1d expression in human monocyte-derived DCs, providing a link between lipid metabolism and lipid Ag presentation. We report that PPARγ regulates the expression of a lysosomal protease, cathepsin D (CatD), in human monocyte-derived DCs. Inhibition of CatD specifically reduced the expansion of invariant NKT cells and furthermore resulted in decreased maturation of saposins, a group of lipid transfer proteins required for lysosomal lipid Ag processing and loading. These results reveal a novel mechanism of lipid Ag presentation and identify CatD as a key component of this machinery and firmly place PPARγ as the transcriptional regulator linking lipid metabolism and lipid Ag processing.