Falcipain-2 (FP-2), a papain family cysteine protease of Plasmodium falciparum, is a promising target for antimalarial chemotherapy. Designing inhibitors that are highly selective for falcipain-2 has been difficult because of broad specificity of different cysteine proteinases. Because propeptide regions of cysteine proteases have been shown to inhibit their cognate enzymes specifically and selectively, in the present study, we evaluated the inhibitory potential of few falcipain-2 proregion peptides. A 15 residue peptide (PP1) inhibited falcipain-2 enzyme activity in vitro. Studies on the uptake of PP1 into the parasitized erythrocytes showed access of peptide into the infected RBCs. PP1 fused with Antennapedia homeoprotein internalization domain blocked hemoglobin hydrolysis, merozoite release and markedly inhibited Plasmodium falciparum growth and maturation. Together, our results identify a peptide derived from the proregion of falcipain-2 that blocks late-stage malaria parasite development in RBCs, suggesting the development of peptide and peptidometric drugs against the human malaria parasite.