Tumor hypoxia interferes with the efficacy of chemotherapy, radiotherapy, and tumor necrosis factor-alpha. TRAIL (tumor necrosis factor-related apoptosis inducing ligand) is a potent apoptosis inducer that limits tumor growth without damaging normal cells and tissues in vivo. We present evidence for a central role of lysosomal cathepsins in hypoxia and/or TRAIL-induced cell death in oral squamous cell carcinoma (OSCC) cells. Hypoxia or TRAIL-induced activation of cathepsins (B, D and L), caspases (-3 and -9), Bid cleavage, release of Bax and cytochrome c, and DNA fragmentation were blocked independently by zVAD-fmk, CA074Me or pepstatin A, consistent with the involvement of lysosomal cathepsin B and D in cell death. Lysosome stability and mitochondrial membrane potential were reduced in hypoxia and TRAIL-induced apoptosis. However, TRAIL treatment under hypoxic condition resulted in diminished apoptosis rates compared to treatment under normoxia. This inhibitory effect of hypoxia on TRAIL-induced apoptosis may be based on preventing Bax activation and thus protecting mitochondria stability. Our data show that TRAIL or hypoxia independently triggered activation of cathepsin B and D leading to apoptosis through Bid and Bax, and suggest that hypoxic tissue regions provide a selective environment for highly apoptosis-resistant clonal cells. Molecular therapy approaches based on cathepsin inhibitors need to address this novel tumor-preventing function of cathepsins in OSCC.