Trypanosoma cruzi, a protozoan parasite, is the etiologic agent of American trypanosomiasis or Chagas' disease. Chagas' disease afflicts more than 24 million individuals in South and Central America producing a debilitating life-long disease. It is the leading cause of heart failure in many Latin American countries. Currently, there is no satisfactory treatment for this parasitic infection. Cruzain (also known as cruzipain, gp 57/51), the major cysteine protease present in T. cruzi, is critical for the development and survival of the parasite within the host cells, making this enzyme a target for potential trypanocidal drugs. Here we report the X-ray crystal structure of cruzain complexed with the potent inhibitor Z-Phe-Ala-fluoromethyl ketone. The structure was determined at 2.35 A (Rcryst = 0.15) by molecular replacement using a modified papain as the search model. The refined structure is compared to papain. Features which distinguish cruzain from papain are discussed since they may aid in the design of specificity inhibitors. Fluorescence microscopy shows that a biotinylated form of the bound inhibitor does not effectively reach host proteases in their lysosomal compartment, but is selectively taken up by the parasite. The inhibitor greatly reduces parasitemia in a cell culture system, without adverse effects to mammalian cells. This biological selectivity can be exploited, in conjunction with unique active site features revealed by the crystal structure, to develop chemotherapy for Chagas' disease.