The release of a thyroid hormone from thyroglobulin is controlled by a complex regulatory system. We focused on the extracellular action of two lysosomal enzymes, cathepsin C (catC, dipeptidyl peptidase I) and PGCP (lysosomal dipeptidase), on thyroglobulin, and their ability to liberate the hormone thyroxin. Cathepsin C, an exopeptidase, removes dipeptides from the N-terminus of substrates, and PGCP hydrolyses dipeptides to amino acids. In vitro experiments proved that cathepsin C removes up to 12 amino acids from the N-terminus of porcine thyroglobulin, including a dipeptide with thyroxin on position 5. The newly formed N-terminus, Arg-Pro-, was not hydrolysed further by cathepsin C. Cell culture experiments with FRTL-5 cell line showed localization of cathepsin C and PGCP and their secretion into the medium. Secretion of the active cathepsin C from FRTL-5 cells is stimulated by TSH, insulin, and/or somatostatin. The released enzymes liberate thyroxin from porcine thyroglobulin added to media. The hormone liberation can be reduced by synthetic inhibitors of cysteine proteinases and metalloproteinases. Additionally, we show that TSH, insulin, and/or somatostatin induce up-regulation of N-acetylglucosaminyltransferase 1, the enzyme responsible for the initiation of biosynthesis of hybrid and complex N-glycosylation of proteins.