Plasmodium falciparum is the major causative agent of malaria, a disease of worldwide importance. Resistance to current drugs such as chloroquine and mefloquine is spreading at an alarming rate, and our antimalarial armamentarium is almost depleted. The malarial parasite encodes two homologous aspartic proteases, plasmepsins I and II, which are essential components of its hemoglobin-degradation pathway and are novel targets for antimalarial drug development. We have determined the crystal structure of recombinant plasmepsin II complexed with pepstatin A. This represents the first reported crystal structure of a protein from P. falciparum. The crystals contain molecules in two different conformations, revealing a remarkable degree of interdomain flexibility of the enzyme. The structure was used to design a series of selective low molecular weight compounds that inhibit both plasmepsin II and the growth of P. falciparum in culture.