Proteolysis in close vicinity of tumor cells is a hallmark of cancer invasion and metastasis. We show here that mouse mammary tumor virus–polyoma middle T antigen (PyMT) transgenic mice deficient for the cysteine protease cathepsin B (CTSB) exhibited a significantly delayed onset and reduced growth rate of mammary cancers compared with wild-type PyMT mice. Lung metastasis volumes were significantly reduced in PyMT;ctsb^+/−, an effect that was not further enhanced in PyMT;ctsb^−/− mice. Furthermore, lung colonization studies of PyMT cells with different CTSB genotypes injected into congenic wild-type mice and in vitro Matrigel invasion assays confirmed a specific role for tumor-derived CTSB in invasion and metastasis. Interestingly, cell surface labeling of cysteine cathepsins by the active site probe DCG-04 detected up-regulation of cathepsin X on PyMT;ctsb^−/− cells. Treatment of cells with a neutralizing anti-cathepsin X antibody significantly reduced Matrigel invasion of PyMT;ctsb^−/− cells but did not affect invasion of PyMT;ctsb^+/+ or PyMT;ctsb^+/− cells, indicating a compensatory function of cathepsin X in CTSB-deficient tumor cells. Finally, an adoptive transfer model, in which ctsb^+/+, ctsb^+/−, and ctsb^−/− recipient mice were challenged with PyMT;ctsb^+/+ cells, was used to address the role of stroma-derived CTSB in lung metastasis formation. Notably, ctsb^−/− mice showed reduced number and volume of lung colonies, and infiltrating macrophages showed a strongly up-regulated expression of CTSB within metastatic cell populations. These results indicate that both cancer cell–derived and stroma cell–derived (i.e., macrophages) CTSB plays an important role in tumor progression and metastasis. (Cancer Res 2006; 66(10): 5242-50)