During atherogenesis, low density lipoprotein (LDL) particles in the arterial intima become modified and fuse to form extracellular lipid droplets. Proteolytic modification of apolipoprotein (apo) B-100 may be one mechanism of droplet formation from LDL. Here we studied whether the newly described acid protease cathepsin F can generate LDL-derived lipid droplets in vitro. Treatment of LDL particles with human recombinant cathepsin F led to extensive degradation of apoB-100, which, as determined by rate zonal flotation, electron microscopy, and NMR spectroscopy, triggered both aggregation and fusion of the LDL particles. Two other acid cysteine proteases, cathepsins S and K, which have been shown to be present in the arterial intima, were also capable of degrading apoB-100, albeit less efficiently. Cathepsin F treatment resulted also in enhanced retention of LDL to human arterial proteoglycans in vitro. Cultured monocyte-derived macrophages were found to secrete active cathepsin F. In addition, similarly with cathepsins S and K, cathepsin F was found to be localized mainly within the macrophage-rich areas of the human coronary atherosclerotic plaques. These results suggest that proteolytic modification of LDL by cathepsin F may be one mechanism leading to the extracellular accumulation of LDL-derived lipid droplets within the proteoglycan-rich extracellular matrix of the arterial intima during atherogenesis.