Tripeptidyl-peptidase I (TPP I, CLN2 protein) is a lysosomal exopeptidase that sequentially removes tripeptides from the N termini of polypeptides and shows a minor endoprotease activity. Mutations in TPP I lead to classic late-infantile neuronal ceroid lipofuscinosis, a neurodegenerative lysosomal storage disease. TPP I proenzyme is converted in lysosomes into a mature enzyme with the assistance of another protease and is able to autoactivate in acidic pH in vitro via a unimolecular mechanism. Because autoactivation in vitro at the pH values reported for lysosomes generated inactive enzyme, we intended to determine whether physiologically relevant factors can modify this process to also make it plausible in vivo. Here, we report that high ionic strength and glycosaminoglycans (GAGs) increase yields (ionic strength) or yields and rates (GAGs) of activation, enhance degradation of liberated TPP I prosegment fragments, and switch effective autoactivation of TPP I proenzyme toward less acidic pH values (up to pH 6.0). Although ionic strength and GAGs also inhibited TPP I activity in vitro and in living cells, the degree of inhibition (from 20 to 60%) appears to be of rather limited functional significance. Importantly, binding to GAGs improved thermal stability of TPP I and protected the enzyme against alkaline pH-induced denaturation in vitro (t1 ⁄2 of mature enzyme at pH 7.4 increased by ϳ8-fold in the presence of heparin) and in vivo (ϳ2-fold higher loss of TPP I in cells deficient in GAGs than in control cells after bafilomycin A1 treatment). These findings elucidate a potent physiologically relevant mechanism of TPP I regulation by GAGs and suggest that generation of the active enzyme via autoactivation can be accomplished not only in vitro but in vivo as well.