The malaria parasite Plasmodium falciparum degrades hemoglobin in its acidic food vacuole for use as a major nutrient source. A novel metallopeptidase activity, falcilysin, was purified from food vacuoles and characterized. Falcilysin appears to function downstream of the aspartic proteases plasmepsins I and II and the cysteine protease falcipain in the hemoglobin proteolytic pathway. It is unable to cleave hemoglobin or denatured globin but readily destroys peptide fragments of hemoglobin. Falcilysin cleavage sites along the alpha and beta chains of hemoglobin are polar in character, with charged residues located in the P1 and/or P4' positions. In contrast, plasmepsins I and II and falcipain prefer hydrophobic residues around the scissile bond. The gene encoding falcilysin has been cloned. Its coding sequence exhibits features characteristic of clan ME family M16 metallopeptidases, including an "inverted" HXXEH active site motif. Falcilysin shares primary structural features with M16 family members such as insulysin, mitochondrial processing peptidase, nardilysin, and pitrilysin as well as with data base hypothetical proteins that are potential M16 family members. The characterization of falcilysin increases our understanding of hemoglobin catabolism in P. falciparum and the unusual M16 family of metallopeptidases.