Poliovirus-encoded nonstructural polypeptide 2C is a multifunctional protein that plays an important role in viral RNA replication. 2C interacts with both intracellular membranes and virus-specific RNAs and has ATPase and GTPase activities. Extensive computer analysis of the 2C sequence revealed that in addition to the known ATPase-, GTPase-, membrane-, and RNA-binding domains it also contains several "serpin" (serine protease inhibitor) motifs. We provide experimental evidence suggesting that 2C is indeed capable of regulating virus-encoded proteases. The purified 2C protein inhibits 3C(pro)-catalyzed cleavage of cellular transcription factors at Q-G sites in vitro. It also inhibits cleavage of a viral precursor by the other viral protease, 2A(pro). However, at least three cellular proteases appear not to be inhibited by 2C in vitro. The 2C-associated protease inhibitory activity can be depleted by anti-2C antibody. A physical interaction between 2C and His-tagged 3C(pro) can be demonstrated in vitro by coimmunoprecipitation of 2C with anti-His antibody. Deletion analysis suggests that the 2C central and C-terminal domains that include several serpin motifs are important for 3C(pro)-inhibitory activity. To examine the 2C protease inhibitory activity in vivo, stable HeLa cell lines were made that express 2C in an inducible fashion. Infection of 2C-expressing cells with poliovirus led to incomplete (or inefficient) processing of viral precursor polypeptides compared to control cell lines containing the vector alone. These results suggest that 2C can negatively regulate the viral protease 3C(pro). The possible role of the 2C protease inhibitory activity in viral RNA replication is discussed.