Proteoglycans are composite molecules comprising a protein backbone, i.e., the core protein, with covalently attached glycosaminoglycan chains of distinct chemical types. Most proteoglycans are secreted or attached to the cell membrane. Their specialized structures, binding properties, and biophysical attributes underlie diverse biological roles, which include modulation of tissue mechanics, cell adhesion, and the sequestration and regulated release of morphogens, growth factors, and cytokines. As an irreversible post-translational modification, proteolysis has a profound impact on proteoglycan function, abundance, and localization. Proteolysis is required for molecular maturation of some proteoglycans, clearance of extracellular matrix proteoglycans during tissue remodeling, generation of bioactive fragments from proteoglycans, and ectodomain shedding of cell-surface proteoglycans. Genetic evidence shows that proteoglycan core protein proteolysis is essential for diverse morphogenetic events during embryonic development. In contrast, dysregulated proteoglycan proteolysis contributes to osteoarthritis, cardiovascular disorders, cancer, and inflammation. Proteolytic fragments of perlecan, versican, aggrecan, brevican, collagen XVIII, and other proteoglycans are associated with independent biological activities as so-called matrikines. Yet, proteoglycan proteolysis has been investigated to only a limited extent to date. Here, we review the actions of proteases on proteoglycans and illustrate their functional impact with several examples. We discuss the applications and limitations of strategies used to define cleavage sites in proteoglycans and explain how proteoglycanome-wide proteolytic mapping, which is desirable to fully understand the impact of proteolysis on proteoglycans, can be facilitated by integrating classical proteoglycan isolation methods with mass spectrometry-based proteomics.