Ustilago maydis is a biotrophic fungus causing corn smut disease in maize. The secreted effector protein Pit2 is an inhibitor of papain-like cysteine proteases (PLCPs) essential for virulence. Pit2 inhibitory function relies on a conserved 14 amino acids motif (PID14). Here we show that synthetic PID14 peptides act more efficiently as PLCP inhibitors than the full-length Pit2 effector. Mass spectrometry shows processing of Pit2 by maize PLCPs, which releases an inhibitory core motif from the PID14 sequence. Mutational analysis demonstrates that two conserved residues are essential for Pit2 function. We propose that the Pit2 effector functions as a substrate mimicking molecule: Pit2 is a suitable substrate for apoplastic PLCPs and its processing releases the embedded inhibitor peptide, which in turn blocks PLCPs to modulate host immunity. Remarkably, the PID14 core motif is present in several plant associated fungi and bacteria, indicating the existence of a conserved microbial inhibitor of proteases (cMIP).