Falcipain-2 (FP2) is a papain family cysteine protease and important hemoglobinase of erythrocytic Plasmodium falciparum parasites. Inhibitors of FP2 block hemoglobin hydrolysis and parasite development, suggesting that this enzyme is a promising target for antimalarial chemotherapy. FP2 and related plasmodial cysteine proteases have an unusual 14-aa motif near the C terminus of the catalytic domain. Recent solution of the structure of FP2 showed this motif to form a beta-hairpin that is distant from the enzyme active site and protrudes out from the protein. To evaluate the function of this motif, we compared the activity of the wild-type enzyme with that of a mutant lacking 10 aa of the motif (Delta10FP2). Delta10FP2 had nearly identical activity to that of the wild-type enzyme against peptide substrates and the protein substrates casein and gelatin. However, Delta10FP2 demonstrated negligible activity against hemoglobin or globin. FP2 that was inhibited with trans-epoxysuccinyl-L-leucylamido-(4-guanidino)butane (FP2E-64) formed a complex with hemoglobin, but Delta10FP2E-64 did not, indicating that the motif mediates binding to hemoglobin independent of the active site. A peptide encoding the motif blocked hemoglobin hydrolysis, but not the hydrolysis of casein. Kinetics for the inhibition of Delta10FP2 were very similar to those for FP2 with peptidyl and protein inhibitors, but Delta10FP2 was poorly inhibited by the inhibitory prodomain of FP2. Our results indicate that FP2 utilizes an unusual motif for two specific functions, interaction with hemoglobin, its natural substrate, and interaction with the prodomain, its natural inhibitor.