CLN5 is a soluble lysosomal glycoprotein. Deficiency in CLN5 protein causes neuronal ceroid lipofuscinosis, an inherited neurodegenerative lysosomal storage disorder. The function of CLN5 and how it affects lysosome activity are unclear. We identified two forms of the CLN5 protein present in most of the cell lines studied. The molecular mass difference between these two forms is about 4kDa. The fibroblast cells derived from two CLN5 patients lack both forms. Using transient transfection, we showed one of these two forms is a proprotein and the other is a C-terminal cleaved mature form. Using cycloheximide chase analysis, we were able to demonstrate that the C-terminal processing occurs post-translationally. By treating cells with several pharmaceutical drugs to inhibit proteases, we showed that the C-terminal processing takes place in an acidic compartment and the protease involved is most likely a cysteine protease. This is further supported by overexpression of a CLN5 patient mutant D279N and a glycosylation mutant N401Q, showing that the C-terminal processing takes place beyond the endoplasmic reticulum, and can occur as early as from the trans Golgi network. Furthermore, we demonstrated that CLN5 is expressed in a variety of murine tissues.