Apicomplexans are obligate intracellular parasites that invade host cells by an active process leading to the formation of a non-fusogenic parasitophorous vacuole (PV) where the parasite replicates within the host cell. The rhomboid family of proteases cleaves substrates within their transmembrane domains and has been implicated in the invasion process. Although its exact function is unknown, Plasmodium ROM1 is hypothesized to play a role during invasion based on its microneme localization and its ability to cleave essential invasion adhesins. Using the rodent malaria model, Plasmodium yoelii, we carried out detailed quantitative analysis of pyrom1 deficient parasites during the Plasmodium lifecycle. Pyrom1(-) parasites are attenuated during erythrocytic and hepatic stages but progress normally through the mosquito vector with normal counts of oocyst and salivary gland sporozoites. Pyrom1 steady state mRNA levels are upregulated 20-fold in salivary gland sporozoites compared to blood stages. We show that pyrom1(-) sporozoites are capable of gliding motility and traversing host cells normally. Wildtype and pyrom1(-) sporozoites do not differ in the rate of entry into Hepa1-6 hepatocytes. Within the first twelve hours of hepatic development, however, only 50% pyrom1(-) parasites have developed into exoerythrocytic forms. Immunofluorescence microscopy using the PVM marker UIS4 and transmission electron microscopy reveal that the PV of a significant fraction of pyrom1(-) parasites are morphologically aberrant shortly after invasion. We propose a novel function for PyROM1 as a protease that promotes proper PV modification to allow parasite development and replication in a suitable environment within the mammalian host.