Plasmodium falciparum-derived cysteine protease falcipain-2 cleaves host erythrocyte hemoglobin at acidic pH and specific components of the membrane skeleton at neutral pH. Analysis of stage-specific expression of these 2 proteolytic activities of falcipain-2 shows that hemoglobin-hydrolyzing activity is maximum in early trophozoites and declines rapidly at late stages, whereas the membrane skeletal protein hydrolyzing activity is markedly increased at the late trophozoite and schizont stages. Among the erythrocyte membrane skeletal proteins, ankyrin and protein 4.1 are cleaved by native and recombinant falcipain-2 near their C-termini. To identify the precise peptide sequence at the hydrolysis site of protein 4.1, we used a recombinant construct of protein 4.1 as substrate followed by MALDI-MS analysis of the cleaved product. We show that falcipain-2-mediated cleavage of protein 4.1 occurs immediately after lysine 437, which lies within a region of the spectrin-actin-binding domain critical for erythrocyte membrane stability. A 16-mer peptide containing the cleavage site completely inhibited the enzyme activity and blocked falcipain-2-induced fragmentation of erythrocyte ghosts. Based on these results, we propose that falcipain-2 cleaves hemoglobin in the acidic food vacuole at the early trophozoite stage, whereas it cleaves specific components of the red cell skeleton at the late trophozoite and schizont stages. It is the proteolysis of skeletal proteins that causes membrane instability, which, in turn, facilitates parasite release in vivo.