Well-studied and promising antimicrobial peptides (AMPs), with potent bactericidal activity, in vitro, have yet to have a significant impact in human medicine beyond topical applications. We previously showed that interactions of AMPs with concentrated human erythrocytes inhibit many of them, and suggested that screens and assays should be done in their presence to mimic host cell inhibition. Here, we use AMPs to characterize the activity of proteases that are associated with human erythrocytes. The representative AMPs, ARVA and indolicidin, are degraded significantly during incubation with dilute, washed erythrocytes and yield a variety of degradation products, suggesting significant exopeptidase activity. Comparison of these fragments with those obtained from incubation with serum shows that the proteolytic activity associated with cells yields unique products that are not explained by residual serum proteases. By separately testing the membrane and cytosolic fractions, we show that erythrocyte proteolytic activity is found only in the cytosol. Finally, we incubated a diverse cross-section of natural and synthetic linear AMPs with human erythrocyte cytosolic extracts and observed degradation of all of them. These results show that, in addition to cell binding, proteolysis can also contribute significantly to host cell inhibition of AMPs in vitro and possibly also in vivo.