We have localized cathepsin K in rat osteoclasts and within exposed resorption pits by immuno-fluorescence microscopy. Intracellular staining using an antibody raised against recombinant mouse cathepsin K was vesicular and uniformly distributed throughout the cell. Confocal microscopy analysis did not reveal an accumulation of cathepsin K containing vesicles opposing the ruffled border and the resorption lacuna. Exposed resorption pits exhibited a uniform distribution of cathepsin K, and no differences were observed between the edges and the centers of the pits. The immunostaining of resorption pits with anti-cathepsin K antibodies demonstrates that the protease is secreted into the sub-osteoclastic compartment. Cathepsin K-specific inhibition using peptidyl vinyl sulfones as selective cysteine protease inactivators reduced bone resorption by 80% in a dose-dependent manner at sub-micromolar concentrations. No reduction of bone resorption was observed at those low concentrations using a potent cathepsin L, S, B-specific inhibitor. That the inhibition of bone resorption can be attributed to cathepsin K-like protease inhibition was corroborated by the selective inhibition of the osteoclastic Z-Gly-Pro-Arg-MbetaNA hydrolyzing activity by the cathepsin K, L, S, B-inhibitor, but not by the cathepsin L, B, and S inhibitor. Z-Gly-Pro-Arg-MbetaNA is efficiently hydrolyzed by cathepsin K but only poorly by cathepsins L, S, and B. On the contrary, the intracellular hydrolysis of the cathepsin B-specific substrate, Z-Arg-Arg-MbetaNA, was prevented by both types of inhibitors. The identification of cathepsin K in resorption pits and the inhibition of bone resorption and intracellular cathepsin K activity by selective vinyl sulfone inhibitors indicate the critical role of the protease in osteoclastic bone resorption.