Cyclotides are plant-derived macrocyclic peptides with potential applications in the pharmaceutical and agricultural industries. In addition to their presumed natural function as host-defence peptides arising from their insecticidal activity, their other biological activities include antimicrobial, haemolytic, and cytotoxic activities, but at present, only limited information is available on the structural and chemical features that are important for these various activities. In the current study, we determined the three-dimensional structure of vhl-2, a leaf-specific cyclotide. Although the characteristic cyclic cystine knot fold of other cyclotides is maintained in vhl-2, it has more potent haemolytic activity than well-characterized cyclotides such as kalata B1 and kalata B8. Analysis of surface hydrophobicity and haemolytic activity for a range of cyclotides indicates a correlation between them, with increasing hydrophobicity resulting in increased haemolytic activity. This correlation is consistent with membrane binding being a vital step in mediating the various cytotoxic activities of cyclotides. The gene sequence for vhl-2 was determined and indicates that vhl-2 is processed from a multidomain precursor protein that also encodes the cyclotide cycloviolacin H3.