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We have shown previously that cathepsin K, a recently identified member of the papain superfamily of cysteine proteases, is expressed selectively in osteoclasts and is the predominant cysteine protease in these cells. Based upon its abundant cell type-selective expression, potent endoprotease activity at low pH and cellular localization at the bone interface, cathepsin K has been proposed to play a specialized role in osteoclast-mediated bone resorption. In this study, we evaluated a series of peptide aldehydes and demonstrated that they are potent cathepsin K inhibitors. These compounds inhibited osteoclast-mediated bone resorption in fetal rat long bone (FRLB) organ cultures in vitro in a concentration-dependent manner. Selected compounds were also shown to inhibit bone resorption in a human osteoclast-mediated assay in vitro. Cbz-Leu-Leu-Leu-H (in vitro enzyme inhibition Ki,app = 1.4 nM) inhibited parathyroid hormone (PTH)-stimulated resorption in the FRLB assay with an IC-50 of 20 nM and inhibited resorption by isolated human osteoclasts cultured on bovine cortical bone slices with an IC-50 of 100 nM. In the adjuvant-arthritic (AA) rat model, in situ hybridization studies demonstrated high levels of cathepsin K expression in osteoclasts at sites of extensive bone loss in the distal tibia. Cbz-Leu-Leu-Leu-H (30 mg/kg, intraperitoneally) significantly reduced this bone loss, as well as the associated hind paw edema. In the thyroparathyriodectomized rat model, Cbz-Leu-Leu-Leu-H inhibited the increase in blood ionized calcium induced by a 6 h infusion of PTH. These data indicate that inhibitors of cathepsin K are effective at reducing osteoclast-mediated bone resorption and may have therapeutic potential in diseases of excessive bone resorption such as rheumatoid arthritis or osteoporosis.