Engineered nanomaterials (ENMs), or small anthropogenic particles approximately < 100 nm in size and of various shapes and compositions, are increasingly incorporated into commercial products and used for industrial and medical purposes. There is an exposure risk to both the population at large and individuals in the workplace with inhalation exposures to ENMs being a primary concern. Further, there is increasing evidence to suggest that certain ENMs may represent a significant health risk, and many of these ENMs exhibit distinct similarities with other particles and fibers that are known to induce adverse health effects, such as asbestos, silica, and particulate matter (PM). Evidence regarding the importance of lysosomal membrane permeabilization (LMP) and release of cathepsins in ENM toxicity has been accumulating. The aim of this review was to describe our current understanding of the mechanisms leading to ENM-associated pathologies, including LMP and the role of cathepsins with a focus on inflammation. In addition, anti-cathepsin agents, some of which have been tested in clinical trials and may prove useful for ameliorating the harmful effects of ENM exposure, are examined.