The synthesis and inhibition kinetics of a new, potent inhibitor of arginine aminopeptidase (aminopeptidase B; EC 3.4.11.6) are reported. The inhibitor is a reduced isostere of bestatin in which the amide carbonyl is replaced by the methylene (-CH2-) moiety. Analysis of the inhibition of arginine aminopeptidase by this inhibitor according to the method of Lineweaver and Burk yields an unusual noncompetitive double-reciprocal plot. The replot of the slopes versus [inhibitor] is linear (Kis = 66 nM), but the replot of the y intercepts (1/V) versus [inhibitor] is hyperbolic (Kii = 10 nM, Kid = 17 nM). These results provide evidence for a kinetic mechanism in which the inhibitor binds to the S1' and S2' subsites on the enzyme, not the S1 and S1' subsites occupied by dipeptide substrates. Furthermore, structure-activity data for a series of ketomethylene dipeptide isosteres in which the amide (-CONH-) of a dipeptide is replaced with the ketomethylene (-COCH2-) moiety show that the S1 and S1' subsites preferentially bind basic and aromatic side chains, respectively. These results are in agreement with the known substrate specificity of arginine aminopeptidase. The structure-activity data for several bestatin analogues, however, show that these compounds do not bind to the S1 and S1' sites of arginine aminopeptidase. A comparison of the data provides evidence that bestatin inhibits arginine aminopeptidase and possibly other aminopeptidases by binding to the S1' and S2' sites of the enzyme.