Recently, the quantity of cathepsin transcripts in cumulus cells was found to be associated with low-developmental competence of bovine oocytes. In the present study, we investigated (1) the relation between cathepsin B activity and the quality of in vitro-matured cumulus-oocyte complexes (IVM COCs) and denuded oocytes and (2) the effect of a cathepsin B inhibitor (E-64) on embryo development and quality. The activity of cathepsin B was evaluated in IVM COCs and denuded oocytes. After maturation of COCs with or without E-64, followed by in vitro fertilization, zygotes were cultured for 8 days. Cleavage and blastocyst rates were evaluated on days 2 and 8, respectively. Quality of embryos was evaluated by differential staining of day 8 blastocysts. TUNEL staining was conducted on IVM COCs and blastocysts. Cathepsin B activity was clearly detected in the low-quality oocytes, and in the cumulus cells of both high- and low-quality oocytes. This latter activity was diminished by addition of E-64. The presence of E-64 during IVM also significantly increased both the blastocyst rate and the total cell number, and improved blastocyst quality associated with a significant increase of trophoectoderm cells. TUNEL staining revealed that inhibition of cathepsin B significantly decreased the number of apoptotic nuclei in both the cumulus cell layer of matured oocytes and blastocysts. These results indicate that cathepsin B activity can be a useful marker of oocyte quality. Furthermore, inhibition of cathepsin B greatly improves the developmental competence of bovine oocytes and increases the number of high-quality embryos.