An X-ray diffraction analysis has been carried out at 2.5-A resolution of the three-dimensional structure of the Rhizopus chinensis carboxyl proteinase complexed with pepstatin. The resulting model of the complex supports the hypothesis [Marciniszyn, J., Hartsuck, J.A., & Tang, J. (1976) J. Biol. Chem. 251, 7088-7094] that statine (3-hydroxy-4-amino-6-methylheptanoic acid) approaches an analogue of the transition state for catalysis. The way in which pepstatin binds to the enzyme can be extended to provide a model of substrate binding and a model of the transition-state complex. This in turn has led to a proposed mechanism of action based on general acid-base catalysis with no covalent intermediates. These predictions are in general agreement with kinetic studies using several carboxyl proteinases, which together with their sequence homology and their common three-dimensional structures suggest that this mechanism can be extrapolated to all carboxyl proteinases.