Lysosomal peptidases are hydrolytic enzymes capable of digesting waste proteins that are targeted to lysosomes via endocytosis and autophagy. Besides intracellular protein catabolism, they play more specific roles in several other cellular processes and pathologies, either within lysosomes, upon secretion into the cell cytoplasm or extracellular space, or bound to the plasma membrane. In cancer, lysosomal peptidases are generally associated with disease progression, as they participate in crucial processes leading to changes in cell morphology, signaling, migration, and invasion, and finally metastasis. However, they can also enhance the mechanisms resulting in cancer regression, such as apoptosis of tumor cells or antitumor immune responses. Lysosomal peptidases have also been identified as hallmarks of aging and neurodegeneration, playing roles in oxidative stress, mitochondrial dysfunction, abnormal intercellular communication, dysregulated trafficking, and the deposition of protein aggregates in neuronal cells. Furthermore, deficiencies in lysosomal peptidases may result in other pathological states, such as lysosomal storage disease. The aim of this review was to highlight the role of lysosomal peptidases in particular pathological processes of cancer and neurodegeneration and to address the potential of lysosomal peptidases in diagnosing and treating patients.