The cysteine protease cathepsin B (CTSB) is frequently overexpressed in human breast cancer and correlated with a poor prognosis. Genetic deficiency or pharmacological inhibition of CTSB attenuates tumor growth, invasion and metastasis in mouse models of human cancers. CTSB is expressed in both cancer cells and cells of the tumor stroma, in particular in tumor-associated macrophages (TAM). In order to evaluate the impact of tumor- or stromal cell-derived CTSB on Polyoma Middle T (PyMT)-induced breast cancer progression, we used in vivo and in vitro approaches to induce human CTSB overexpression in PyMT cancer cells or stromal cells alone or in combination. Orthotopic transplantation experiments revealed that CTSB overexpression in cancer cells rather than in the stroma affects PyMT tumor progression. In 3D cultures, primary PyMT tumor cells showed higher extracellular matrix proteolysis and enhanced collective cell invasion when CTSB was overexpressed and proteolytically active. Coculture of PyMT cells with bone marrow-derived macrophages induced a TAM-like macrophage phenotype in vitro, and the presence of such M2-polarized macrophages in 3D cultures enhanced sprouting of tumor spheroids. We employed a doxycycline (DOX)-inducible CTSB expression system to selectively overexpress human CTSB either in cancer cells or in macrophages in 3D cocultures. Tumor spheroid invasiveness was only enhanced when CTSB was overexpressed in cancer cells, whereas CTSB expression in macrophages alone did not further promote invasiveness of tumor spheroids. We conclude that CTSB overexpression in the PyMT mouse model promotes tumor progression not by a stromal effect, but by a direct, cancer cell-inherent mode of action: CTSB overexpression renders the PyMT cancers more invasive by increasing proteolytic extracellular matrix protein degradation fostering collective cell invasion into adjacent tissue.