The presence of macrophages within breast tumors correlates with metastatic potential. These tumor-associated macrophages often take on a pro-tumorigenic (M2-like) phenotype resulting in the secretion of growth factors and proteases, including the lysosomal protease cathepsin L. Since cathepsin L also is frequently secreted by breast cancer cells and contributes to tumor invasion, metastasis, and angiogenesis, we hypothesized that secretion of cathepsin L by both tumor-associated macrophages and neoplastic cells would facilitate the metastatic phenotype. Our results showed that the novel cathepsin L/K inhibitors KGP94 and KGP207 could inhibit in vitro M2 macrophage invasion and reduce the macrophage-stimulated invasion of 4T1 murine breast cancer cells. KGP94 and KGP207 treatment also reduced the expression of several M2-associated markers, suggesting that cathepsin L activity may be important for IL-4-driven M0 to M2 differentiation. In addition, cathepsin L shRNA knockdown studies revealed that cathepsin L from both the tumor cell and the macrophage population is important for tumor cell invasion. Thus our data suggest that tumor cells and macrophages may both contribute to the cathepsin L-driven metastatic phenotype of breast cancer. Taken together, these studies highlight the importance of cathepsin L in macrophage functions and suggest that cathepsin inhibition strategies may be therapeutically beneficial by impairing the progression of tumors with high infiltration of M2 macrophages.