Giardia duodenalis infections are among the most common causes of waterborne diarrhoeal disease worldwide. At the height of infection, G. duodenalis trophozoites induce multiple pathophysiological processes within intestinal epithelial cells that contribute to the development of diarrhoeal disease. To date, our understanding of pathophysiological processes in giardiasis remains incompletely understood. The present study reveals a previously unappreciated role for G. duodenalis cathepsin cysteine proteases in intestinal epithelial pathophysiological processes that occur during giardiasis. Experiments first established that Giardia trophozoites indeed produce cathepsin B and L in strain-dependent fashion. Co-incubation of G. duodenalis with human enterocytes enhanced cathepsin production by Assemblage A (NF and S2 isolates) trophozoites, but not when epithelial cells were exposed to Assemblage B (GSM isolate) trophozoites. Direct contact between G. duodenalis parasites and human intestinal epithelial monolayers resulted in the degradation and redistribution of the intestinal epithelial cytoskeletal protein villin; these effects were abolished when parasite cathepsin cysteine proteases were inhibited. Interestingly, inhibition of parasite proteases did not prevent degradation of the intestinal tight junction-associated protein zonula occludens 1 (ZO-1), suggesting that G. duodenalis induces multiple pathophysiological processes within intestinal epithelial cells. Finally, this study demonstrates that G. duodenalis-mediated disruption of villin is, at least, in part dependent on activation of myosin light chain kinase (MLCK). Taken together, this study indicates a novel role for parasite cathepsin cysteine proteases in the pathophysiology of G. duodenalis infections.