The membrane-bound glycoprotein dipeptidyl peptidase IV (DP IV, CD26) is a unique multifunctional protein, acting as receptor, binding and proteolytic molecule. We have determined the sequence and 1.8 A crystal structure of native DP IV prepared from porcine kidney. The crystal structure reveals a 2-2-2 symmetric tetrameric assembly which depends on the natively glycosylated beta-propeller blade IV. The crystal structure indicates that tetramerization of DP IV is a key mechanism to regulate its interaction with other components. Each subunit comprises two structural domains, the N-terminal eight-bladed beta-propeller with open Velcro topology and the C-terminal alpha/beta-hydrolase domain. Analogy with the structurally related POP and tricorn protease suggests that substrates access the buried active site through the beta-propeller tunnel while products leave the active site through a separate side exit. A dipeptide mimicking inhibitor complexed to the active site discloses key determinants for substrate recognition, including a Glu-Glu motif that distinguishes DP IV as an aminopeptidase and an oxyanion trap that binds and activates the P(2)-carbonyl oxygen necessary for efficient postproline cleavage. We discuss active and nonactive site-directed inhibition strategies of this pharmaceutical target protein.