Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins (PubMed:15169837, PubMed:12473658, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004, PubMed:32732290). The protease activity is required for proteolytic activation of ATG8 family proteins: cleaves the C-terminal amino acid of ATG8 proteins to reveal a C-terminal glycine (PubMed:15169837, PubMed:12473658, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). Exposure of the glycine at the C-terminus is essential for ATG8 proteins conjugation to phosphatidylethanolamine (PE) and insertion to membranes, which is necessary for autophagy (PubMed:15169837, PubMed:12473658, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). Preferred substrate is GABARAPL2 followed by MAP1LC3A and GABARAP (PubMed:15169837, PubMed:12473658, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). Protease activity is also required to counteract formation of high-molecular weight conjugates of ATG8 proteins (ATG8ylation): acts as a deubiquitinating-like enzyme that removes ATG8 conjugated to other proteins, such as ATG3 (PubMed:31315929, PubMed:33773106). In addition to the protease activity, also mediates delipidation of ATG8 family proteins (PubMed:29458288, PubMed:33909989). Catalyzes delipidation of PE-conjugated forms of ATG8 proteins during macroautophagy (PubMed:29458288, PubMed:33909989). Compared to ATG4B, the major protein for proteolytic activation of ATG8 proteins, shows weaker ability to cleave the C-terminal amino acid of ATG8 proteins, while it displays stronger delipidation activity (PubMed:29458288). Involved in phagophore growth during mitophagy independently of its protease activity and of ATG8 proteins: acts by regulating ATG9A trafficking to mitochondria and promoting phagophore-endoplasmic reticulum contacts during the lipid transfer phase of mitophagy (PubMed:33773106). [protein]-C-terminal L-amino acid-glycyl-phosphatidylethanolamide + H2O = [protein]-C-terminal L-amino acid-glycine + a 1,2-diacyl-sn-glycero-3-phosphoethanolamine Inhibited by N-ethylmaleimide (PubMed:12473658, PubMed:21177865). Redox-regulated during autophagy since reducing conditions activate ATG4A whereas an oxidizing environment such as the presence of H(2)O(2) inhibits its activity (PubMed:17347651). Interacts with ATG9A; the interaction is direct. The LIR motif (LC3-interacting region) is required for the interaction with the ATG8 family proteins (PubMed:28287329). Required for proteolytic activation and delipidation of ATG8 proteins (PubMed:32732290). Belongs to the peptidase C54 family. A paper describing ATG4D tissue expression has been retracted, due to concerns of image duplication in some of the figures.