Stopped-flow kinetics showed that the inhibition of the lysosomal cysteine proteinase, cathepsin B, by its endogenous inhibitor, cystatin C, occurs by a two-step mechanism, in which an initial, weak interaction is followed by a conformational change. The initial interaction most likely involves binding of the N-terminal region of the inhibitor to the proteinase. Considerable evidence indicates that the subsequent conformational change is due to the inhibitor displacing the occluding loop of the proteinase that partially obscures the active site. The presence of this loop, which allows the enzyme to function as an exopeptidase, thus complicates the inhibition mechanism, rendering cathepsin B much less susceptible than other cysteine proteinases to inhibition by cystatins.