Prolyl oligopeptidase is a large cytosolic enzyme that belongs to a new class of serine peptidases. The enzyme is involved in the maturation and degradation of peptide hormones and neuropeptides, which relate to the induction of amnesia. The 1.4 A resolution crystal structure is presented here. The enzyme contains a peptidase domain with an alpha/beta hydrolase fold, and its catalytic triad (Ser554, His680, Asp641) is covered by the central tunnel of an unusual beta propeller. This domain makes prolyl oligopeptidase an oligopeptidase by excluding large structured peptides from the active site. In this way, the propeller protects larger peptides and proteins from proteolysis in the cytosol. The structure is also obtained with a transition state inhibitor, which may facilitate drug design to treat memory disorders.