Human endostatin, a potent anti-angiogenic protein, is generated by release of the C terminus of collagen XVIII. Here, we propose that cysteine cathepsins are involved in both the liberation and activation of bioactive endostatin fragments, thus regulating their anti-angiogenic properties. Cathepsins B, S, and L efficiently cleaved in vitro FRET peptides that encompass the hinge region corresponding to the N terminus of endostatin. However, in human umbilical vein endothelial cell-based assays, silencing of cathepsins S and L, but not cathepsin B, impaired the generation of the ∼22-kDa endostatin species. Moreover, cathepsins L and S released two peptides from endostatin with increased angiostatic properties and both encompassing the NGR sequence, a vasculature homing motif. The G10T peptide (residues 1455-1464: collagen XVIII numbering) displayed compelling anti-proliferative (EC(50) = 0.23 nm) and proapoptotic properties. G10T inhibited aminopeptidase N (APN/CD13) and reduced tube formation of endothelial cells in a manner similar to bestatin. Combination of G10T with bestatin resulted in no further increase in anti-angiogenic activity. Taken together, these data suggest that endostatin-derived peptides may represent novel molecular links between cathepsins and APN/CD13 in the regulation of angiogenesis.