Cathepsin B is an important protease within the lysosome, where it helps recycle proteins to maintain proteostasis. It is also known to degrade proteins elsewhere but has no other known functionality. However, by carefully monitoring peptide digestion with liquid chromatography and mass spectrometry, we observed the synthesis of novel peptides during cathepsin B incubations. This ligation activity was explored further with a variety of peptide substrates to establish mechanistic details and was found to operate through a two-step mechanism with proteolysis and ligation occurring separately. Further explorations using varied sequences indicated increased affinity for some substrates, though all were found to ligate to some extent. Finally, experiments with a proteolytically inactive form of the enzyme yielded no ligation, indicating that the ligation reaction occurs in the same active site but in the reverse direction of proteolysis. These results clearly establish that in its native form cathepsin B can act as both a protease and ligase, although protease action eventually dominates over longer periods of time.