Proteases constitute one of the primary targets in drug discovery. In the present review, we focus on extracellular proteases (ECPs) because of their differential expression in many pathophysiological processes, including cancer, cardiovascular conditions, and inflammatory, pulmonary, and periodontal diseases. Many new ECP inhibitors are currently under clinical investigation and a significant increase in new therapies based on protease inhibition can be expected in the coming years. In addition to directly blocking the activity of a targeted protease, one can take advantage of differential expression in disease states to selectively deliver therapeutic or imaging agents. Recent studies in targeted drug development for the metalloproteases (matrix metalloproteinases, adamalysins, pappalysins, neprilysin, angiotensin-converting enzyme, metallocarboxypeptidases, and glutamate carboxypeptidase II), serine proteases (elastase, coagulation factors, tissue/urokinase plasminogen activator system, kallikreins, tryptase, dipeptidyl peptidase IV) and cysteine proteases (cathepsin B) are discussed herein.