Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins. 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. 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. Preferred substrate is GABARAPL2 followed by MAP1LC3A and GABARAP. 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. In addition to the protease activity, also mediates delipidation of ATG8 family proteins. Catalyzes delipidation of PE-conjugated forms of ATG8 proteins during macroautophagy. 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. 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. [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. 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. Interacts with ATG9A; the interaction is direct. The LIR motif (LC3-interacting region) is required for the interaction with the ATG8 family proteins. Required for proteolytic activation and delipidation of ATG8 proteins. Belongs to the peptidase C54 family.