Cysteine cathepsins have been for a long time considered to execute mainly nonspecific bulk proteolysis in the endolysosomal system. However, this view has been changing profoundly over the last decade as cathepsins were found in the cytoplasm, nucleus and in the extracellular milieu. Cathepsins are currently gaining increased attention largely because of their extracellular roles associated with disease development and progression. While kept under tight control under physiological conditions, their dysregulated and elevated activity in the extracellular milieu are distinctive hallmarks of numerous diseases such as various cancers, inflammatory disorders, rheumatoid arthritis, bone disorders and heart diseases. In this review, we discuss cysteine cathepsins with a major focus on their extracellular roles and extracellular proteolytic targets beyond degradation of the extracellular matrix. We further highlight the perspectives of cathepsin research and novel avenues in cathepsin-based diagnostic and therapeutic applications. •Cysteine cathepsins are often highly upregulated in inflammation-associated diseases linked with ECM remodelling.•Proteomic studies led to identification of several new cathepsin substrates revealing novel roles of cathepsins in the ECM.•Cathepsin K inhibitor Odanacatib failed in advanced clinical trials, but alternatives seem to be on a way.•Diagnostic imaging of cysteine cathepsins in oncology has entered clinical trials•Cathepsins are largely used as activators of prodrugs and antibody-drug conjugates in oncology