The crystal structure of penicillopepsin, an extracellular acid protease isolated from the mold Penicillium janthinellum, has been determined at 2.8 A resolution by the method of multiple isomorphous replacement. The resulting electron density map computed from the native structure factor amplitudes and MIR phases has an overall mean figure of merit of 0.90. The molecule is decidedly nonspherical, with the majority of residues in beta-structure. There is an 18-stranded mixed beta-sheet which forms the structural core in the region of the active site. This site, identified by the covalent binding of two EPNP molecules to Asp-32 and Asp-215, is located in a deep groove which divides the molecule into two approximately equal lobes. Both aspartic acid residues in the active site are in intimate contact with one another and the carboxyl group of Asp-32 makes two other important hydrogen-bonded contacts: one with Ser-35 and the other with the main chain peptide bond between Thr-216 and Gly-217. A proposed mechanism for acid protease catalysis is similar in many aspects to that proposed for carboxypeptidase A. The electrophilic component which polarizes the substrate carbonyl bond in the acid proteases is the proton shared between the beta-carboxyl groups of Asp-32 and Asp-215. The beta-carboxyl group of Asp-32 removes a proton from a water molecule bound between this side chain and the substrate; the resultant OH- attacks the carbonyl carbon atom of the substrate molecule. The phenolic -OH group of Tyr-75 donates its proton to the amide nitrogen of the scissile bond of the substrate.