SignificanceIL-36γ is a potent cytokine that drives and orchestrates inflammation. It is strongly expressed at barrier tissues such as the skin and thus is particularly relevant to inflammatory diseases that affect these tissues, including psoriasis. IL-36γ is expressed as an inactive precursor that requires precise N-terminal truncation for activation. In these investigations, we demonstrate that cathepsin S is the major IL-36γ–activating protease expressed by barrier tissues. Moreover, we show that both cathepsin S and IL-36γ are strongly up-regulated in psoriatic inflammation. These findings are important as they both identify the mechanism of IL-36γ activation and highlight that this mechanism may play a central role in the development of psoriatic inflammation.