Structural basis for ligand-induced protein stabilization was investigated in the case of an acid phosphatase (red kidney bean purple acid phosphatase (KBPAP)) from red kidney bean. Phosphate, a physiological ligand, increases the stability against solvent denaturation by 3.5 kcal/mol. Generality of phosphate stabilization was shown by similar effects with other KBPAP ligands viz. adenosine 5'-O-(thiotriphosphate), a nonhydrolyzable ligand, and arsenate, an inhibitor. The dissociation constant of phosphate obtained from denaturation curves matches with the dissociation constant estimated by conventional methods. The guanidinium chloride-mediated denaturation of KBPAP was monitored by several structural and functional parameters viz. activity, tryptophan fluorescence, 8-anilinonaphthalene 1-sulfonic acid binding, circular dichroism, and size exclusion chromatography, in the presence and absence of 10 mM phosphate. In the presence of phosphate, profiles of all the parameters shift to a higher guanidinium chloride concentration. Noncoincidence of these profiles in the absence of phosphate indicates multistate unfolding pathway for KBPAP; however, in the presence of phosphate, KBPAP unfolds with a single intermediate. Based on the crystal structure, we propose that the Arg258 may have an important role to play in stabilization mediated by phosphate.