Cathepsin K was originally identified as an osteoclast-specific lysosomal protease, the inhibitor of which has been considered might have therapeutic potential. We show that inhibition of cathepsin K could potently suppress autoimmune inflammation of the joints as well as osteoclastic bone resorption in autoimmune arthritis. Furthermore, cathepsin K ^–/– mice were resistant to experimental autoimmune encephalomyelitis. Pharmacological inhibition or targeted disruption of cathepsin K resulted in defective Toll-like receptor 9 signaling in dendritic cells in response to unmethylated CpG DNA, which in turn led to attenuated induction of T helper 17 cells, without affecting the antigen-presenting ability of dendritic cells. These results suggest that cathepsin K plays an important role in the immune system and may serve as a valid therapeutic target in autoimmune diseases.