We found a dipeptidyl aminopeptidase activity in the parasitic protozoan Giardia lamblia with properties similar to the lysosomal cathepsin C of rat-liver lysosomes. Subcellular fractionation of this parasite indicated that the cathepsin C activity is located in organelles not distinguishable from the ones containing acid phosphatase, a known marker enzyme of Giardia lysosome-like peripheral vesicles. Contrary to the rat lysosomal enzyme, Giardia cathepsin C behaved like a membrane protein. Moreover, the enzyme was not solubilized by Triton X-100 or Triton X-100/SDS at 0 °C but could be substantially solubilized by octylglucoside, Triton X-100 at 37 °C or by a pretreatment with the cholesterol complexing agent β-cyclodextrin before the Triton/SDS treatment carried out at 0 °C. These observations suggest that binding/anchorage of this enzyme to membranes occurs in cholesterol-rich microdomains.