Regulation of neuroinflammation and β-amyloid (Aβ) production are critical factors in the pathogenesis of Alzheimer's disease (AD). Cathepsin E (CatE), an aspartic protease, is widely studied as an inducer of growth arrest and apoptosis in several types of cancer cells. However, the function of CatE in AD is unknown. In this study, we demonstrated that the ablation of CatE in human amyloid precursor protein knock-in mice, called APPNL-G-F mice, significantly reduced Aβ accumulation, neuroinflammation, and cognitive impairments. Mechanistically, microglial CatE is involved in the secretion of soluble TNF-related apoptosis-inducing ligand, which plays an important role in microglia-mediated NF-κB-dependent neuroinflammation and neuronal Aβ production by beta-site APP cleaving enzyme 1. Furthermore, cannula-delivered CatE inhibitors improved memory function and reduced Aβ accumulation and neuroinflammation in AD mice. Our findings reveal that CatE as a modulator of microglial activation and neurodegeneration in AD and suggest CatE as a therapeutic target for AD by targeting neuroinflammation and Aβ pathology.© 2022 The Authors. Aging Cell published by the Anatomical Society and John Wiley & Sons Ltd.