Progressive impairment of protein homeostasis is a universal hallmark of aging, stress and disease. One potential site for this cellular dysfunction is the lysosome, which is responsible for macromolecular breakdown and recycling. We previously showed in C. elegans that granulin peptides, the cleavage products of the neurodegenerative disease protein progranulin, selectively enhance TAR DNA-binding protein 43 (TDP-43) toxicity and impair its degradation (Salazar J. Neurosci 2015). Now, we provide genetic, biochemical, computational modeling and behavioral evidence supporting a role for C. elegans granulin 3 as a stress and age-responsive inhibitor of the lysosomal aspartyl protease, ASP-3/CTSD. C. elegans progranulin contains three granulins. We show that granulin production increases with age and stress. Transgenic expression of individual granulins impairs stress response and learning and memory. Granulins localize to the lysosome where they stimulate movement of the autophagy-promoting transcription factor HLH-30/TFEB from the cytosol to the nucleus. Co-immunoprecipitation experiments show that C. elegans granulin 3 interacts with the lysosomal aspartyl protease, ASP-3, which has previously been implicated in necrotic cell death. Protein docking models predict that granulin 3 binds to and occludes the protease active site. Supporting this, ASP-3 activity is significantly reduced in granulin expressing animals. Furthermore, the expression of granulin 3 in a
deg-1(d) background delays the cell death of mechanosensory neurons and prolongs response to gentle touch. In addition, human patients carrying progranulin mutations produce more granulin fragments in degenerative brain regions than age-matched controls, and this is accompanied by a significant reduction in CTSD activity. Our results identify granulins as a novel class of endogenous peptide aspartyl protease inhibitor, which in analogy to serpins and cystatins we call aspartins. Given that age and stress can increase granulin production, we propose that the regulated production of granulin peptides can impair protein homeostasis and contribute to neurodegenerative disease pathogenesis. These results also suggest that dysregulation of lysosomal protease activity may more generally contribute to aging and age-related diseases.