Cathepsin B is a papain-family cysteine protease that is normally located in lysosomes, where it is involved in the turnover of proteins and plays various roles in maintaining the normal metabolism of cells. This protease has been implicated in pathological conditions, e.g., tumor progression and arthritis. In disease conditions, increases in the expression of cathepsin B occur at both the gene and protein levels. At the gene level, the altered expression results from gene amplification, elevated transcription, use of alternative promoters and alternative splicing. These molecular changes lead to increased cathepsin B protein levels and in turn redistribution, secretion and increased activity. Here we focus on the molecular regulation of cathepsin B and attendant implications for tumor progression and arthritis. The potential of cathepsin B as a therapeutic target is also discussed.