Endosomal and lysosomal fractions of human monocytes/macrophages prepared from buffy coats were analyzed for activities of cathepsins B, L and S, and expression of cathepsin proteins along with major histocompatibility complex class I and class II molecules under control and immunomodulatory conditions. While the total activity of cathepsins B, L, and S together remained unchanged in lysates of control cells during culture for 72 h, the subcellular distribution of cathepsin activities underwent a shift from a predominantly endosomal localization in freshly isolated cells to a lysosomal pattern after 72 h of culture. Interferon-gamma treatment for 72 h resulted in an upregulation of both major histocompatibility complex proteins and cathepsins with differential changes in cathepsin B, L and S activities in endosomes versus lysosomes. These changes suggest a remodeling of the endocytic machinery and imply different functions of cathepsins B, L and S during monocyte differentiation.