The progressive myoclonus epilepsies, featuring the triad of myoclonus, seizures, and ataxia, comprise a large group of inherited neurodegenerative diseases that remain poorly understood and refractory to treatment. The Cystatin B gene is mutated in one of the most common forms of progressive myoclonus epilepsy, Unverricht-Lundborg disease (EPM1). Cystatin B knockout in a mouse model of EPM1 triggers progressive degeneration of cerebellar granule neurons. Here, we report impaired redox homeostasis as a key mechanism by which Cystatin B deficiency triggers neurodegeneration. Oxidative stress induces the expression of Cystatin B in cerebellar granule neurons, and EPM1 patient-linked mutation of the Cystatin B gene promoter impairs oxidative stress induction of Cystatin B transcription. Importantly, Cystatin B knockout or knockdown sensitizes cerebellar granule neurons to oxidative stress-induced cell death. The Cystatin B deficiency-induced predisposition to oxidative stress in neurons is mediated by the lysosomal protease Cathepsin B. We uncover evidence of oxidative damage, reflected by depletion of antioxidants and increased lipid peroxidation, in the cerebellum of Cystatin B knock-out mice in vivo. Collectively, our findings define a pathophysiological mechanism in EPM1, whereby Cystatin B deficiency couples oxidative stress to neuronal death and degeneration, and may thus provide the basis for novel treatment approaches for the progressive myoclonus epilepsies.