Cathepsin B-like genes from Leishmania donovani and Leishmania chagasi have been isolated and characterized. It is a single gene, which is constitutively expressed in all the life cycle stages of the parasite. Studies using cathepsin B-specific inhibitor treatment suggested that cathepsin B does not seem to play a role in the promastigote stages of the parasite, however it aids in the parasite survival within the host macrophages. Antisense mRNA inhibition of cathepsin B gene also revealed that it plays an important role in the parasite survival within the host macrophages. Furthermore, for the first time, we have shown that Leishmania whole cell lysates as well as the recombinant cathepsin B protein cleaved human recombinant latent transforming growth factor (TGF)-beta1 into a mature peptide releasing the latency associated protein, in a cell-free incubation system. Mink lung epithelial cell growth inhibition assay revealed that the cleaved TGF-beta1 was biologically active, suggesting that Leishmania cathepsin B can cleave latent TGF-beta1 into mature and active form. These results suggest that cathepsin B plays an important role in Leishmania survival within the host macrophages by activating latent TGF-beta1.