Caspases play a crucial role in the ability of animal cells to kill themselves by apoptosis. Caspase activity is regulated in vivo by members of three distinct protease inhibitor families, one of which--p35--has so far only been found in baculoviruses. P35 has previously been shown to rapidly form essentially irreversible complexes with its target caspases in a process that is accompanied by peptide bond cleavage. To determine the protease-inhibitory pathway utilized by this very selective protease inhibitor, we have analyzed the thermodynamic and kinetic stability of the protein. We show that the conformation of p35 is stabilized following cleavage within its reactive site loop. An inactive catalytic mutant of caspase 3 is bound by p35, but much less avidly than the wild-type enzyme, indicating that the protease catalytic nucleophile is required for stable complex formation. The inhibited protease is trapped as a covalent adduct, most likely with its catalytic Cys esterified to the carbonyl carbon of the scissile peptide bond. Together these data reveal that p35 is a mechanism-based inactivator that has adopted an inhibitory device reminiscent of the widely distributed serpin family, despite a complete lack of sequence or structural homology.