Previously we indicated that a specific delay in subunit c degradation causes the accumulation of mitochondrial ATP synthase subunit c in lysosomes from the cells of patients with the late infantile form of neuronal ceroid lipofuscinosis (NCL). To explore the mechanism of lysosomal storage of subunit c in patient cells, we investigated the mechanism of the lysosomal accumulation of subunit c both in cultured normal fibroblasts and in in vitro cell‐free incubation experiments. Addition of pepstatin to normal fibroblasts causes the marked lysosomal accumulation of subunit c and less accumulation of Mn²⁺‐superoxide dismutase (SOD). In contrast, E‐64‐d stimulates greater lysosomal storage of Mn²⁺‐SOD than of subunit c. Incubation of mitochondrial‐lysosomal fractions from control and diseased cells at acidic pH leads to a much more rapid degradation of subunit c in control cells than in diseased cells, whereas other mitochondrial proteins, including Mn²⁺‐SOD, β subunit of ATP synthase, and subunit IV of cytochrome oxidase, are degraded at similar rates in both control and patient cells. The proteolysis of subunit c in normal cell extracts is inhibited markedly by pepstatin and weakly by E‐64‐c, as in the cultured cell experiments. However, there are no differences in the lysosomal protease levels, including the levels of the pepstatin‐sensitive aspartic protease cathepsin D between control and patient cells. The stable subunit c in mitochondrial‐lysosomal fractions from patient cells is degraded on incubation with mitochondrial‐lysosomal fractions from control cells. Exchange experiments using radiolabeled substrates and nonlabeled proteolytic sources from control and patient cells showed that proteolytic dysfunction, rather than structural alterations such as the posttranslational modification of subunit c, is responsible for the specific delay in the degradation of subunit c in the late infantile form of NCL.