During angiogenesis, microvascular endothelial cells (ECs) secrete proteinases that permit penetration of the vascular basement membrane as well as the interstitial extracellular matrix. This study tested the hypothesis that cathepsin S (Cat S) contributes to angiogenesis. Treatment of cultured ECs with inflammatory cytokines or angiogenic factors stimulated the expression of Cat S, whereas inhibition of Cat S activity reduced microtubule formation by impairing cell invasion. ECs from Cat S–deficient mice showed reduced collagenolytic activity and impaired invasion of collagens type I and IV. Cat S–deficient mice displayed defective microvessel development during wound repair. This abnormal angiogenesis occurred despite normal vascular endothelial growth factor and basic fibroblast growth factor levels, implying an essential role for extracellular matrix degradation by Cat S during microvessel formation. These results demonstrate a novel function of endothelium-derived Cat S in angiogenesis.