Cathepsin S (CatS) is a secreted cysteine protease that cleaves certain extracellular matrix proteins, regulates antigen presentation in antigen-presenting cells (APC), and promotes M2-type macrophage and dendritic cell polarization. CatS is overexpressed in many solid cancers, and overall, it appears to promote an immune-suppressive and tumor-promoting microenvironment. While most data suggest that CatS inhibition or knockdown promotes anti-cancer immunity, cell-specific inhibition, especially in myeloid cells, appears to be important for therapeutic efficacy. This makes the design of CatS selective inhibitors and their targeting to tumor-associated M2-type macrophages (TAM) and DC an attractive therapeutic strategy compared to the use of non-selective immunosuppressive compounds or untargeted approaches. The selective inhibition of CatS can be achieved through optimized small molecule inhibitors that show good pharmacokinetic profiles and are orally bioavailable. The targeting of these inhibitors to TAM is now more feasible using nanocarriers that are functionalized for a directed delivery. This review discusses the role of CatS in the immunological tumor microenvironment and upcoming possibilities for a nanocarrier-mediated delivery of potent and selective CatS inhibitors to TAM and related APC to promote anti-tumor immunity.