The general view on cysteine cathepsins, which were long believed to be primarily involved in intracellular protein turnover, has dramatically changed in last 10 to 15 years. The discovery of new cathepsins, such as cathepsins K, V, X, F and O, and their tissue distribution suggested that at least some of them are involved in very specific cellular processes. Moreover, gene ablation experiments revealed that cathepsins play a vital role in numerous physiological processes, such as antigen processing and presentation, bone remodelling, prohormone processing and wound healing. Their involvement in several pathologies, including osteoporosis, rheumatoid arthritis, osteoarthritis, bronchial asthma and cancer have also been confirmed and today several of them have been validated as relevant targets for therapies. Compounds targeting cathepsins S and K are already in clinical evaluation, whereas others are in experimental phases. The cathepsin K inhibitor AAE-581 (balicatib) as the most advanced of them passed Phase II clinical trials in 2005. In this review, we discuss the current view on cathepsins as an emerging group of targets for several diseases and the development of cathepsin K and S inhibitors for treatment of osteoporosis and various immune disorders.