This thesis describes work done to design and synthesize protease inhibitors, with the intention of developing therapeutic agents for Alzheimer’s disease (AD) and the chronic liver condition caused by infection of the hepatitis C virus (HCV). AD is the most common form of dementia, and HCV infection is the primary reason for liver transplantation in industrialized countries. Today, these two illnesses affect 24 and 170 million people, respectively. It has been shown that the human aspartic protease BACE-1 plays an important role in the development of AD, and thus inhibition of BACE-1 may offer a way to improve the quality of life of individuals afflicted with the disease. Furthermore, it is known that the serine protease NS3 is a vital component in the replication of HCV. Several novel potent BACE-1 inhibitors encompassing different transition state mimics were prepared. First, a hydroxyethylene moiety encompassing a secondary hydroxyl group was evaluated as a transition state analogue, producing inhibitors in the low nanomolar range. Various tertiary hydroxyl isosteres were also investigated as the central core, with the aim of shielding the pivotal hydroxyl group. These transition state isosteres consisted of tertiary hydroxyl analogues of previously used secondary hydroxyl containing norstatine, statine, and hydroxyethylamine isosteres. Several tertiary hydroxyl-containing inhibitors were found to be active in the low micromolar range. In addition, two inhibitors were co-crystallized with the BACE-1 enzyme to provide X-ray crystal structures, which furnished valuable binding information for further design of improved BACE-1 inhibitors. The goal in the HCV NS3 protease inhibitor project was to design, synthesize and evaluate a novel hydroxycyclopentene bioisostere to the previously used acyl-hydroxyproline moiety. The investigation revealed that it was possible to synthesize inhibitors containing this new bioisostere that were potent in the low nanomolar range. Further optimization by rigidification of the most active inhibitor resulted in equipotent macrocyclic compounds.