We present here the first report of a hydrophilic peptidic inhibitor, ATBI, from an extremophilic Bacillus sp. exhibiting a two-step inhibition mechanism against the aspartic proteases, pepsin and F-prot from Aspergillus saitoi. Kinetic analysis shows that these proteases are competitively inhibited by ATBI. The progress curves are time-dependent and consistent with slow-tight binding inhibition: E + I right arrow over left arrow (k(3), k(4)) EI right arrow over left arrow (k(5), k(6)) EI. The K(i) values for the first reversible complex (EI) of ATBI with pepsin and F-prot were (17 +/- 0.5) x 10(-9) M and (3.2 +/- 0.6) x 10(-6) M, whereas the overall inhibition constant K(i) values were (55 +/- 0.5) x 10(-12) M and (5.2 +/- 0.6) x 10(-8) M, respectively. The rate constant k(5) revealed a faster isomerization of EI for F-prot [(2.3 +/- 0.4) x 10(-3) s(-1)] than pepsin [(7.7 +/- 0.3) x 10(-4) s(-1)]. However, ATBI dissociated from the tight enzyme-inhibitor complex (EI) of F-prot faster [(3.8 +/- 0.5) x 10(-5) s(-1)] than pepsin [(2.5 +/- 0.4) x 10(-6) s(-1)]. Comparative analysis of the kinetic parameters with pepstatin, the known inhibitor of pepsin, revealed a higher value of k(5)/k(6) for ATBI. The binding of the inhibitor with the aspartic proteases and the subsequent conformational changes induced were monitored by exploiting the intrinsic tryptophanyl fluorescence. The rate constants derived from the fluorescence data were in agreement with those obtained from the kinetic analysis; therefore, the induced conformational changes were correlated to the isomerization of EI to EI. Chemical modification of the Asp or Glu by WRK and Lys residues by TNBS abolished the antiproteolytic activity and revealed the involvement of two carboxyl groups and one amine group of ATBI in the enzymatic inactivation.