An imbalance between neutrophil-derived proteases and extracellular inhibitors is widely regarded as an important pathogenic mechanism for lung injury. Despite intense efforts over the last three decades, attempts to develop small-molecule inhibitors for neutrophil elastase have failed in the clinic. Here we discover an intrinsic self-cleaving property of mouse neutrophil elastase that interferes with the action of elastase inhibitors. We show that conversion of the single-chain (sc) into a two-chain (tc) neutrophil elastase by self-cleavage near its S1 pocket altered substrate activity and impaired both inhibition by endogenous α-1-antitrypsin and synthetic small molecules. Our data indicate that autoconversion of neutrophil elastase decreases the inhibitory efficacy of natural α-1-antitrypsin and small-molecule inhibitors, while retaining its pathological potential in an experimental mouse model. The so-far overlooked occurrence and properties of a naturally occurring tc-form of neutrophil elastase necessitates the redesign of small-molecule inhibitors that target the sc-form as well as the tc-form of neutrophil elastase.