Regulated intramembrane proteolysis is of pivotal importance in a diverse set of developmental and physiological processes. Altered intramembrane substrate turnover may be associated with neurodegeneration, cancer and impaired immune function. In this review we will focus on the intramembrane proteases which have been localized in the lysosomal membrane. Members of the γ-secretase complex and γ-secretase activity are found in the lysosomal membrane and are discussed to contribute to intracellular amyloid β production. Mutant or deficient γ-secretase may cause disturbed lysosomal function. The signal peptide peptidase-like (SPPL) protease 2a is a lysosomal membrane component and cleaves CD74, the invariant chain of the MHC II complex, as well as FasL, TNF, ITM2B and TMEM106, type II transmembrane proteins involved in the regulation of immunity and neurodegeneration. Therefore, it can be concluded, that not only proteolysis within the lysosomal lumen but also within lysosomal membranes regulates important cellular functions and contributes essentially to proteostasis of membrane proteins what may become increasingly compromised in the aged individual.