Cathepsin E is an endosomal aspartic proteinase that is predominantly expressed in immune-related cells. Recently, we showed that macrophages derived from cathepsin E-deficient (CatE(-/-)) mice display accumulation of lysosomal membrane proteins and abnormal membrane trafficking. In this study, we demonstrated that CatE(-/-) macrophages exhibit abnormalities in autophagy, a bulk degradation system for aggregated proteins and damaged organelles. CatE(-/-) macrophages showed increased accumulation of autophagy marker proteins such as LC3 and p62, and polyubiquitinated proteins. Cathepsin E deficiency also altered autophagy-related signaling pathways such as those mediated by the mammalian target of rapamycin (mTOR), Akt, and extracellular signal-related kinase (ERK). Furthermore, immunofluorescence microscopy analyses showed that LC3-positive vesicles were merged with acidic compartments in wild-type macrophages, but not in CatE(-/-) macrophages, indicating inhibition of fusion of autophagosome with lysosomes in CatE(-/-) cells. Delayed degradation of LC3 protein was also observed under starvation-induced conditions. Since the autophagy system is involved in the degradation of damaged mitochondria, we examined the accumulation of damaged mitochondria in CatE(-/-) macrophages. Several mitochondrial abnormalities such as decreased intracellular ATP levels, depolarized mitochondrial membrane potential, and decreased mitochondrial oxygen consumption were observed. Such mitochondrial dysfunction likely led to the accompanying oxidative stress. In fact, CatE(-/-) macrophages showed increased reactive oxygen species (ROS) production and up-regulation of oxidized peroxiredoxin-6, but decreased antioxidant glutathione. These results indicate that cathepsin E deficiency causes autophagy impairment concomitantly with increased aberrant mitochondria as well as increased oxidative stress.