Cysteinyl cathepsin K (CatK) is expressed in osteoclasts to mediate bone resorption, but it is also inducible under inflammatory conditions. Faslpr mice on a C57BL/6 background develop spontaneous systemic lupus erythematosus (SLE)-like manifestations. While normal mouse kidneys expressed negligible CatK, those from Faslpr mice showed elevated CatK expression in the glomeruli and tubulointerstitial space. Faslpr mice also showed elevated serum CatK levels. CatK deficiency in Faslpr mice reduced all tested kidney pathologies, including glomerulus and tubulointerstitial scores, glomerulus complement C3 and IgG deposition, chemokine expression and macrophage infiltration, and serum autoantibodies. CatK contributed to Faslpr mouse autoimmunity and pathology in part by its activity in Toll-like receptor-7 (TLR7) proteolytic processing and consequent regulatory T cell (Treg) biology. Elevated TLR7 expression and proteolytic processing in Faslpr mouse kidneys and Treg cells showed significantly reduced levels in CatK-deficient mice, leading to increased spleen and kidney Treg content. Purified CD4+CD25highFoxp3+ Treg cells from CatK-deficient mice doubled their immunosuppressive activity against T effector cells, compared to those from CatK-sufficient mice. In Faslpr mice, repopulation of purified Treg cells from CatK-sufficient mice reduced spleen sizes, autoantibody titers, and glomerulus C3 and IgG deposition, and increased splenic and kidney Treg cell contents. Treg cells from CatK-deficient mice had significantly more potency than CatK-sufficient Treg cells in reducing spleen sizes, serum autoantibody titers, and glomerulus C3 deposition, and in increasing splenic and kidney Treg cell content. This study established a possible role of CatK in TLR7 proteolytic activation, Treg immunosuppressive activity, and lupus autoimmunity and pathology.