Native gamma-trace, a small basic protein present in high concentration in cerebrospinal fluid, semen and neuroendocrine cells, but of unknown biological function, is shown to be a potent inhibitor of the cysteine proteinases papain, ficin, and human cathepsins B, H and L. It proves to be the tightest -binding protein inhibitor of cathepsin B so far discovered. The name cystatin C is proposed for gamma-trace to reflect the many similarities in activity and structure to chicken egg-white cystatin and mammalian cystatins A and B. The inhibition constants of cystatin C, taken together with its widespread distribution in human tissues and extracellular fluids, suggest that a physiological function could well be the regulation of cysteine proteinase activity.