The crystal structure of a catalytically inactive form of cathepsin D (CatDhi) has been obtained at pH 7.5. The N-terminal strand relocates by 30 A from its position in the interdomain beta-sheet and inserts into the active site cleft, effectively blocking substrate access. CatDhi has a five-stranded interdomain beta-sheet and resembles Intermediate 3, a hypothetical structure proposed to be transiently formed during proteolytic activation of the proenzyme precursor. Interconversion between active and inactive forms of CatD is reversible and may be regulated by an ionizable switch involving the carboxylate side chains of Glu 5, Glu 180, and Asp 187. Our findings provide a structural basis for the pH-dependent regulation of aspartic proteinase activity and suggest a novel mechanism for pH-dependent modulation of substrate specificity.