Trophozoites of the malaria parasite Plasmodium falciparum hydrolyze erythrocyte hemoglobin in an acidic food vacuole to provide amino acids for parasite protein synthesis. Cysteine protease inhibitors block hemoglobin degradation, indicating that a cysteine protease plays a key role in this process. A principal trophozoite cysteine protease was purified by affinity chromatography. Sequence analysis indicated that the protease is encoded by a previously unidentified gene, falcipain-2. Falcipain-2 was predominantly expressed in trophozoites, was concentrated in food vacuoles, and was responsible for at least 93% of trophozoite soluble cysteine protease activity. A construct encoding mature falcipain-2 and a small portion of the prodomain was expressed in Escherichia coli and refolded to active enzyme. Specificity for the hydrolysis of peptide substrates by native and recombinant falcipain-2 was very similar, and optimal at acid pH in a reducing environment. Under physiological conditions (pH 5.5, 1 mM glutathione), falcipain-2 hydrolyzed both native hemoglobin and denatured globin. Our results suggest that falcipain-2 can initiate cleavage of native hemoglobin in the P. falciparum food vacuole, that, following initial cleavages, the protease plays a key role in rapidly hydrolyzing globin fragments, and that a drug discovery effort targeted at this protease is appropriate.