Cysteine proteases play important roles in pathobiology. Here we reveal that cathepsin K (CatK) has a role in ischaemia-induced neovascularization. Femoral artery ligation-induced ischaemia in mice increases CatK expression and activity, and CatK-deficient mice show impaired functional recovery following hindlimb ischaemia. CatK deficiency reduces the levels of cleaved Notch1 (c-Notch1), Hes1 Hey1, Hey2, vascular endothelial growth factor, Flt-1 and phospho-Akt proteins of the ischaemic muscles. In endothelial cells, silencing of CatK mimicked, whereas CatK overexpression enhanced, the levels of c-Notch1 and the expression of Notch downstream signalling molecules, suggesting CatK contributes to Notch1 processing and activates downstream signalling. Moreover, CatK knockdown leads to defective endothelial cell invasion, proliferation and tube formation, and CatK deficiency is associated with decreased circulating endothelial progenitor cells-like CD31(+)/c-Kit(+) cells in mice following hindlimb ischaemia. Transplantation of bone marrow-derived mononuclear cells from CatK(+/+) mice restores the impairment of neovascularization in CatK(-/-) mice. We conclude that CatK may be a potential therapeutic target for ischaemic disease.