Cathepsin S (CTSS) is a member of cysteine protease family. Although many studies have demonstrated the vital role of CTSS in many physiological and pathological processes including tumor growth, angiogenesis and metastasis, the function of CTSS in the development of rabbit granulosa cells (GCS) remains unknown. To address this question, we isolated rabbit GCS and explored the regulatory function of the CTSS gene in cell proliferation and apoptosis. CTSS overexpression significantly promoted the secretion of progesterone (P4) and estrogen (E2) by increasing the expression of STAR and CYP19A1 (p < 0.05). We also found that overexpression of CTSS increased GCS proliferation by up-regulating the expression of proliferation related gene (PCNA) and anti-apoptotic gene (BCL2). Cell apoptosis was markedly decreased by CTSS activation (p < 0.05). In contrast, CTSS knockdown significantly decreased the secretion of P4 and E2 and the proliferation of rabbit GCS, while increasing the apoptosis of rabbit GCS. Taken together, our results highlight the important role of CTSS in regulating hormone secretion, cell proliferation, and apoptosis in rabbit GCS. These results might provide a basis for better understanding the molecular mechanism of rabbit reproduction.