Smooth muscle cell (SMC) migration from the tunica media to the intima, a key event in neointimal formation, requires proteolytic degradation of elastin-rich extracellular matrix barriers. Although cathepsin S (Cat S) is overexpressed in atherosclerotic and neointimal lesions, its exact role in SMC behavior remains primarily unresolved. We examined the involvement of Cat S on SMC migration through an extracellular matrix barrier and its localization in SMCs. A selective Cat S inhibitor and the endogenous inhibitor cystatin C significantly attenuated SMC invasion across elastin gel. Western blotting and cell surface biotinylation analysis demonstrated localization of the 28-kd active form of Cat S on the SMC surface, consistent with its role in the proteolysis of subcellular matrices. Treatment with interferon-γ or interleukin-β1 significantly augmented the ability of SMC membranes to degrade elastin along with a significant increase in the level of active Cat S compared with controls. Immunofluorescence and confocal microscopy showed a punctuated pattern of Cat S clusters at the periphery of SMCs; further studies demonstrated partial co-localization of Cat S and integrin ανβ3 at the cell surfaces. These findings demonstrate that active Cat S co-localizes with integrin ανβ3 as a receptor on the SMC surface, playing an important role in the invasive behavior of SMCs.