Calpains are a family of intracellular cysteine proteases activated by calcium. They participate in many processes including cell motility, cell cycle progression and cell death, in response to calcium signaling. Because calpain over-activation as a result of calcium dysregulation is a contributing factor to many disease states, these enzymes are important therapeutic targets. Within the cell, calpains 1 and 2 are regulated by the protein inhibitor calpastatin. This unstructured protein is specific for calpain, binds tightly, and recognizes only the activated form of the enzyme. Detailed kinetic data obtained using surface plasmon resonance allowed the association and dissociation rates of each of the four calpastatin inhibitory domains to be measured. Based on this, inhibitory domain 4 was selected to be co-crystallized bound to calpain 2. The X-ray crystal structure of this complex provided both the first view of the active enzyme, as well as the first view of how it is inhibited. Calpastatin wraps around the enzyme making contact with each domain. It lies in the active site as a contiguous polypeptide chain and escapes cleavage by forming a loop away from the catalytic cysteine. In addition to inhibiting substrate cleavage, calpastatin protects calpain in two ways; it prevents autoproteolysis, and it prevents calcium-dependent aggregation. The crystal structure of the calpastatin:calpain complex revealed no obvious reason for this stabilization. To elucidate how this protection occurs, peptides were synthesized corresponding to conserved subdomains of calpastatin. Surprisingly, each peptide alone was capable of preventing aggregation in vitro, by blocking hydrophobic patches exposed upon activation. The increased hydrophobic surface of the activated enzyme may alter calpain’s affinity for other proteins such as substrates. By binding across many domains of calpain, calpastatin could act to block protein-protein interactions. These studies have characterized calpastatin’s interaction with calpain, which will further our understanding of the enzyme’s regulation and aid in the development of better calpain inhibitors.