Our earlier studies showed that bleomycin-induced apoptosis of type II alveolar epithelial cells (AECs) requires the autocrine synthesis and proteolytic processing of angiotensinogen into ANG II and that inhibitors of ANG-converting enzyme (ACEis) block bleomycin-induced apoptosis (Li X, Zhang H, Soledad-Conrad V, Zhuang J, and Uhal BD. Am J Physiol Lung Cell Mol Physiol 284: L501-L507, 2003). Given the documented role of cathepsin D (CatD) in apoptosis of other cell types, we hypothesized that CatD might be the AEC enzyme responsible for the conversion of angiotensinogen into ANG I, the substrate for ACE. Primary cultures of rat type II AECs challenged with bleomycin in vitro showed upregulation and secretion of CatD enzymatic activity and immunoreactive protein but no increases in CatD mRNA. The aspartyl protease inhibitor pepstatin A, which completely blocked CatD enzymatic activity, inhibited bleomycin-induced nuclear fragmentation by 76% and reduced bleomycin-induced caspase-3 activation by 47%. Antisense oligonucleotides against CatD mRNA reduced CatD-immunoreactive protein and inhibited bleomycin-induced nuclear fragmentation by 48%. A purified fragment of angiotensinogen (F1-14) containing the CatD and ACE cleavage sites, when applied to unchallenged AEC in vitro, yielded mature ANG II peptide and induced apoptosis. The apoptosis induced by F1-14 was inhibited 96% by pepstatin A and 77% by neutralizing antibodies specific for CatD (both P < 0.001). These data indicate a critical role for CatD in bleomycin-induced apoptosis of cultured AEC and suggest that the role(s) of CatD in AEC apoptosis include the conversion of newly synthesized angiotensinogen to ANG II.