Emphysema is characterized by loss of lung elasticity and irreversible air space enlargement, usually in the later decades of life. The molecular mechanisms of emphysema remain poorly defined. We identified a role for a novel cathepsin, cathepsin E, in promoting emphysema by inducing mitochondrial fission. Unlike previously reported cysteine cathepsins, which have been implicated in cigarette smoke-induced lung disease, cathepsin E is a nonlysosomal intracellular aspartic protease whose function has been described only in antigen processing. We examined lung tissue sections of persons with chronic obstructive pulmonary disease, a clinical entity that includes emphysematous change. Human chronic obstructive pulmonary disease lungs had markedly increased cathepsin E protein in the lung epithelium. We generated lung epithelial-targeted transgenic cathepsin E mice and found that they develop emphysema. Overexpression of cathepsin E resulted in increased E3 ubiquitin ligase parkin, mitochondrial fission protein dynamin-related protein 1, caspase activation/apoptosis, and ultimately loss of lung parenchyma resembling emphysema. Inhibiting dynamin-related protein 1, using a small molecule inhibitor in vitro or in vivo, inhibited cathepsin E-induced apoptosis and emphysema. To the best of our knowledge, our study is the first to identify links between cathepsin E, mitochondrial fission, and caspase activation/apoptosis in the pathogenesis of pulmonary emphysema. Our data expand the current understanding of molecular mechanisms of emphysema development and may provide new therapeutic targets.