The human genome encodes 11 cysteine cathepsins belonging to the papain-like family of cysteine peptidases that are known predominantly as endo-lysosomal enzymes. However, it is now understood that the functions and activities of cysteine cathepsins are not limited to endo-lysosomal compartments, as they are also active in the peri-and extracellular space. The thyroid gland is an endocrine organ where such intra-and extracellular proteolytic activities are required to solubilize the prohormone thyroglobulin from its luminal, covalently cross-linked storage forms for subsequent processing into smaller protein fragments and thyroid hormone liberation. Cathepsin K has been identified as one of the cysteine cathepsins with a crucial role in thyroglobulin processing. However, cathepsin K has mainly been a key focus of attention in the last few years because of its high expression in osteoclasts and due to its essential role as collagenase and elastase important for bone remodelling. Besides its remarkable function as an endopeptidase acting on highmolecular mass, covalently cross-linked extracellular substrates such as type I collagen, elastin or thyroglobulin, cathepsin K is also one of the very few proteolytic enzymes that is able to directly liberate thyroxine from thyroglobulin fragments by exopeptidase action. Thus, thyroid cathepsin K is now accepted as a cysteine peptidase with a vital role in liberation of thyroid hormones, which in turn are essential for homoeostasis by triggering a number of important biological processes, ranging from growth and brain development in young vertebrates to tissue remodelling events during morphogenesis or wound healing, as well as control of metabolic pathways and thermoregulation in adults. This review focuses on thyroid cathepsin K and will discuss how localization and trafficking within thyroid epithelial cells explain its thyroid-specific functions. The effects of targeted cathepsin K gene ablation will be summarized from the perspective of the thyroid gland, and we will propose potential consequences of short-and long-term inhibition of thyroid cathepsin K activity for the main thyroid hormone target tissues, namely bone, cardiovascular and immune systems, intestine, and the central nervous system, in addition to the thyroid gland itself.