The lysosomal cysteine proteases cathepsins S and L play crucial roles in the degradation of the invariant chain during maturation of MHC class II molecules and antigen processing. The p41 form of the invariant chain includes a fragment which specifically inhibits cathepsin L but not S. The crystal structure of the p41 fragment, a homologue of the thyroglobulin type-1 domains, has been determined at 2.0 Å resolution in complex with cathepsin L. The structure of the p41 fragment demonstrates a novel fold, consisting of two subdomains, each stabilized by disulfide bridges. The first subdomain is an α-helix–β-strand arrangement, whereas the second subdomain has a predominantly β-strand arrangement. The wedge shape and three-loop arrangement of the p41 fragment bound to the active site cleft of cathepsin L are reminiscent of the inhibitory edge of cystatins, thus demonstrating the first example of convergent evolution observed in cysteine protease inhibitors. However, the different fold of the p41 fragment results in additional contacts with the top of the R-domain of the enzymes, which defines the specificity-determining S2 and S1′ substrate-binding sites. This enables inhibitors based on the thyroglobulin type-1 domain fold, in contrast to the rather non-selective cystatins, to exhibit specificity for their target enzymes.