Autoantigenic peptides resulting from self-proteins such as proinsulin are important players in the development of type 1 diabetes mellitus (T1D). Self-proteins can be processed by cathepsins (Cats) within endocytic compartments and loaded to major histocompatibility complex (MHC) class II molecules for CD4(+) T cell inspection. However, the processing and presentation of proinsulin by antigen-presenting cells (APC) in humans is only partially understood. Here we demonstrate that the processing of proinsulin by B cell or myeloid dendritic cell (mDC1)-derived lysosomal cathepsins resulted in several proinsulin-derived intermediates. These intermediates were similar to those obtained using purified CatG and, to a lesser extent, CatD, S, and V in vitro. Some of these intermediates polarized T cell activation in peripheral blood mononuclear cells (PBMC) from T1D patients indicative for naturally processed T cell epitopes. Furthermore, CatG activity was found to be elevated in PBMC from T1D patients and abrogation of CatG activity resulted in functional inhibition of proinsulin-reactive T cells. Our data suggested the notion that CatG plays a critical role in proinsulin processing and is important in the activation process of diabetogenic T cells.