Streptomyces mobaraensis produces the papain inhibitor SPI consisting of a 12 kDa protein and small active compounds (SPIac). Purification of the papain inhibitory compounds resulted in four diverse chymostatin derivatives that were characterized by NMR and MS analysis. Chymostatins are hydrophobic tetrapeptide aldehydes from streptomycetes, e.g., S. lavendulae and S. hygroscopicus, that reverse chymosin-mediated angiotensin activation and inhibit other serine and cysteine proteases. Chymotrypsin and papain were both inhibited by the SPIac compounds in the low nanomolar range. SPIac differs from the characterized chymostatins by the exchange of phenylalanine for tyrosine. The crystal structure of one of these chymostatin variants confirmed its molecular structure and revealed a S-configured hemithioacetal bond with the catalytic Cys25 thiolate as well as close interactions with hydrophobic S1 and S2 subsite amino acids. A model for chymostatin biosynthesis is provided based on the discovery of clustered genes encoding several putative nonribosomal peptide synthetases; among them, there is the unusual CstF enzyme that accommodates two canonical amino acid activation domains as well as three peptide carrier protein domains.