Cathepsin S (CTSS) is a cysteine protease that regulates many physiological processes and is increased in obesity and type 2 diabetes. While previous studies show that deletion of CTSS improves glycemic control through suppression of hepatic glucose output, little is known about the role of circulating CTSS in regulating glucose and energy metabolism. We assessed the effects of recombinant CTSS on metabolism in cultured hepatocytes, myotubes and adipocytes, and in mice following acute CTSS administration. CTSS improved glucose tolerance in lean mice and this coincided with increased plasma insulin. CTSS reduced G6pc and Pck1 mRNA expression and glucose output from hepatocytes but did not affect glucose metabolism in myotubes or adipocytes. CTSS did not affect insulin secretion from pancreatic beta-cells, rather CTSS stimulated glucagon-like peptide (GLP)-1 secretion from intestinal mucosal tissues. CTSS retained its positive effects on glycemic control in mice injected the GLP-1 receptor antagonist exendin (9-39) amide. The effects of CTSS on glycemic control were not retained in high-fat fed mice or db/db mice, despite the preservation of CTSS’ inhibitory actions on hepatic glucose output in isolated primary hepatocytes. In conclusion, we unveil a role for CTSS in the regulation of glycemic control via direct effects on hepatocytes, and that these effects on glycemic control are abrogated in insulin resistant states.