Tripeptidyl peptidase I (TPP-I) is a lysosomal enzyme that cleaves tripeptides from the N-terminus of polypeptides. A comparison of TPP-I amino acid sequences with sequences derived from an EST database suggested that TPP-I is identical to a pepstatin-insensitive carboxyl proteinase of unknown specificity which is mutated in classical late infantile neuronal ceroid lipofuscinosis (LINCL), a lysosomal storage disease. Both TPP-I and the carboxyl proteinase have an M(r) of about 46 kDa and are, or are predicted to be, resistant to inhibitors of the four major classes of proteinases. Fibroblasts from LINCL patients have less than 5% of the normal TPP-I activity. The activities of other lysosomal enzymes, including proteinases, are in the normal range. LINCL fibroblasts are also defective at degrading short polypeptides and this defect can be induced in normal fibroblasts by treatment with a specific inhibitor or TPP-I. These results suggest that the cell damage, especially neuronal, observed in LINCL results from the defective degradation and consequent lysosomal storage of small peptides.