Phospholipase A(2) (EC 3.1.1.4) is a key enzyme of the cascade mechanism involved in the production of proinflammatory compounds known as eicosanoids. The binding of phospholipase A2 to membrane surfaces and the hydrolysis of phospholipids are thought to involve the formation of a hydrophobic channel into which a single substrate molecule diffuses before cleavage. In order to regulate the production of proinflammatory compounds, a specific peptide inhibitor of PLA(2), Leu-Ala-Ile-Tyr-Ser, has been designed. Phospholipase A2 from Daboia russelli pulchella (DPLA(2)) and peptide LeuAla-Ile-Tyr-Ser (LAIYS) have been co-crystallized. The structure of the complex has been determined and refined to 2.0 Angstrom resolution. The structure contains two crystallographically independent molecules of DPLA2, with one molecule of peptide specifically bound to one of them. The overall conformations of the two molecules are essentially similar except in three regions; namely, the calcium-binding loop including Trp31 (residues 25-34), the beta-wing consisting of two antiparallel beta-strands (residues 74-85) and the C-terminal region (residues 119-133). Of these, the most striking difference pertains to the orientation of Trp31 in the two molecules. The conformation of Trp31 in molecule A was suitable to allow the binding of peptide LAIYS, while that in molecule B prevented the entry of the ligand into the hydrophobic channel. The structure of the complex clearly showed that the OH group of Tyr of the inhibitor formed hydrogen bonds with both His48 N-delta1 and Asp49 O-delta1, while (OH)-H-gamma of Ser was involved in a hydrogen bond with Trp31. Other peptide backbone atoms interact with protein through water molecules, while Leu, Ala and Ile form strong hydrophobic interactions with the residues of the hydrophobic channel.