As an abundantly expressed cysteine protease inhibitor widely distributed in the organisms, cystatin C is involved in various physiological processes. Due to its relatively small molecular weight and easy detection, cystatin C is commonly used as a measure for glomerular filtration rate. In pathological conditions, however, growing evidences suggest that cystatin C is associated with various immune responses against either exogenous or endogenous antigens, which ultimately result in inflammatory autoimmune diseases or tumor development if not properly controlled. Thus the fluctuation of cystatin C levels might have more clinical implications than a reflection of kidney functions. Here, we summarize the latest development of studies on the pathophysiological functions of cystatin C, with focus on its immune regulatory roles at both cellular and molecular levels including antigen presentation, secretion of cytokines, synthesis of nitric oxide, as well as apoptosis. Finally, we discuss the clinical implications and therapeutic potentials of what this predominantly expressed protease inhibitor can bring to us.