Cysteine peptidases play a central role in the biology of Leishmania. In this work, we sought to further elucidate the mechanism(s) by which the cysteine peptidase CPB contributes to L. mexicana virulence and whether CPB participates in the formation of large communal parasitophorous vacuoles induced by these parasites. We initially examined the impact of L. mexicana infection on the trafficking of VAMP3 and VAMP8, two endocytic SNARE proteins associated with phagolysosome biogenesis and function. Using a CPB-deficient mutant, we found that both VAMP3 and VAMP8 were down-modulated in a CPB-dependent manner. We also discovered that expression of the virulence-associated GPI-anchored metalloprotease GP63 was inhibited in the absence of CPB. Expression of GP63 in the CPB-deficient mutant was sufficient to down-modulate VAMP3 and VAMP8. Similarly, episomal expression of GP63 enabled the CPB-deficient mutant to establish infection in macrophages, induce the formation of large communal parasitophorous vacuoles, and cause lesions in mice. These findings implicate CPB in the regulation of GP63 expression and provide evidence that both GP63 and CPB are key virulence factors in L. mexicana.