Lysosomal cysteine proteases from mammalian cells and plants are regulated by endogenous tight-binding inhibitors from the cystatin superfamily. The presence of cystatin-like inhibitors in lower eukaryotes such as protozoan parasites has not yet been demonstrated, although these cells express large quantities of cysteine proteases and may also count on endogenous inhibitors to regulate cellular proteolysis. Trypanosoma cruzi, the causative agent of Chagas' heart disease, is a relevant model to explore this possibility because these intracellular parasites rely on their major lysosomal cysteine protease (cruzipain) to invade and multiply in mammalian host cells. Here we report the isolation, biochemical characterization, developmental stage distribution and subcellular localization of chagasin, an endogenous cysteine protease inhibitor in T. cruzi. We used high temperature induced denaturation to isolate a heat-stable cruzipain-binding protein (apparent molecular mass, 12 kDa) from epimastigote lysates. This protein was subsequently characterized as a tight-binding and reversible inhibitor of papain-like cysteine proteases. Immunoblotting indicated that the expression of chagasin is developmentally regulated and inversely correlated with that of cruzipain. Gold-labeled antibodies localized chagasin to the flagellar pocket and cytoplasmic vesicles of trypomastigotes and to the cell surface of amastigotes. Binding assays performed by probing living parasites with fluorescein (FITC)-cruzipain or FITC-chagasin revealed the presence of both inhibitor and protease at the cell surface of amastigotes. The intersection of chagasin and cruzipain trafficking pathways may represent a checkpoint for downstream regulation of proteolysis in trypanosomatid protozoa.