Cystatin F is a recently discovered type II cystatin expressed almost exclusively in immune cells. It is present intracellularly in lysosome-like vesicles, which suggests a potential role in regulating papain-like cathepsins involved in antigen presentation. Therefore, interactions of cystatin F with several of its potential targets, cathepsins F, K, V, S, H, X and C, were studied in vitro. Cystatin F tightly inhibited cathepsins F, K and V with Ki values ranging from 0.17 nM to 0.35 nM, whereas cathepsins S and H were inhibited with 100-fold lower affinities (Ki approximately 30 nM). The exopeptidases, cathepsins C and X were not inhibited by cystatin F. In order to investigate the biological significance of the inhibition data, the intracellular localization of cystatin F and its potential targets, cathepsins B, H, L, S, C and K, were studied by confocal microscopy in U937 promonocyte cells. Although vesicular staining was observed for all the enzymes, only cathepsins H and X were found to be colocalized with the inhibitor. This suggests that cystatin F in U937 cells may function as a regulatory inhibitor of proteolytic activity of cathepsin H or, more likely, as a protection against cathepsins misdirected to specific cystatin F containing endosomal/lysosomal vesicles. The finding that cystatin F was not colocalized with cystatin C suggests distinct functions for these two cysteine protease inhibitors in U937 cells.