In one of the most common mutations causing metachromatic leukodystrophy, the P426L-allele of arylsulfatase A (ASA), the deficiency of ASA results from its instability in lysosomes. Inhibition of lysosomal cysteine proteinases protects the P426L-ASA and restores the sulfatide catabolism in fibroblasts of the patients. P426L-ASA, but not wild type ASA, was cleaved by purified cathepsin L at threonine 421 yielding 54- and 9-kDa fragments. X-ray crystallography at 2.5-A resolution showed that cleavage is not due to a difference in the protein fold that would expose the peptide bond following threonine 421 to proteases. Octamerization, which depends on protonation of Glu-424, was impaired for P426L-ASA. The mutation lowers the pH for the octamer/dimer equilibrium by 0.6 pH units from pH 5.8 to 5.2. A second oligomerization mutant (ASA-A464R) was generated that failed to octamerize even at pH 4.8. A464R-ASA was degraded in lysosomes to catalytically active 54-kDa intermediate. In cathepsin L-deficient fibroblasts, degradation of P426L-ASA and A464R-ASA to the 54-kDa fragment was reduced, while further degradation was blocked. This indicates that defective oligomerization of ASA allows degradation of ASA to a catalytically active 54-kDa intermediate by lysosomal cysteine proteinases, including cathepsin L. Further degradation of the 54-kDa intermediate critically depends on cathepsin L and is modified by the structure of the 9-kDa cleavage product.