High molecular weight serpins are members of a large superfamily of structurally conserved proteins that in-activate target proteinases by a suicide substrate-like mechanism. In vertebrates, different clades of serpins distribute predominantly to either the intracellular or extracellular space. Although much is known about the function, structure, and inhibitory mechanism of circulating serpins such as α1-antitrypsin (SERPINA1) and antithrombin III (SERPINC1), relatively little is known about the function of the vertebrate intracellular (clade B) serpins. To gain a better understanding of the biology of the intracellular serpins, we initiated a comparative genomics study using Caenorhabditis elegans as a model system. A screen of the C. elegans genomic and cDNA databases revealed nine serpin genes, tandemly arrayed on chromosome V. Although the C. elegans serpins represent a unique clade (L), they share significant functional homology with members of the clade B group of intracellular serpins, since they lack typical N-terminal signal peptides and reside intracellularly. To determine whether nematode serpins function as proteinase inhibitors, one family member, srp-2, was chosen for further characterization. Biochemical analysis of recombinant SRP-2 protein revealed SRP-2 to be a dual cross-class inhibitor of the apoptosis-related serine proteinase, granzyme B, and the lysosomal cysteine proteinases, cathepsins K, L, S, and V. Analysis of temporal and spatial expression indicated that SRP-2 was present during early embryonic development and highly expressed in the intestine and hypoderm of larval and adult worms. Transgenic animals engineered to overexpress SRP-2 were slow growing and/or arrested at the first, second, or third larval stages. These data suggest that perturbations of serpin-proteinase balance are critical for correct postembryonic development in C. elegans.