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A series of azapeptides as potential inhibitors of cysteine proteases were synthesized. Their structures, based on the binding center of cystatins, contain an azaglycine residue (Agly) in place of the evolutionarily conserved glycine residue in the N-terminal part of the enzyme binding region of cystatins. Incorporation of Agly should lead to deactivation of the acyl−enzyme complex formed against nucleophilic attack by water molecules in the final step of peptide bond hydrolysis. The majority of synthesized azapeptides shows high inhibitory potency toward the investigated cysteine proteases, papain, cathepsin B, and cathepsin K. One of them, Z-Arg-Leu-Val-Agly-Ile-Val-OMe (compound 17), which contains in its sequence the amino acid residues from the N-terminal binding segment as well as the hydrophobic residues from the first binding loop of human cystatin C, proved to be a highly potent and selective inhibitor of cathepsin B. It inhibits cathepsin B with a Ki value of 0.088 nM. To investigate the influence of the structure of compound 17 for its inhibitory properties, we determined its conformation by means of NMR studies and theoretical calculations. The Z-Arg-Leu-Val-Agly fragment, covalently linked to Cys29 of cathepsin B, was also developed and modeled, in the catalytic pocket of the enzyme, through a molecular dynamics approach, to analyze ligand−protein interactions in detail. Analysis of the simulation trajectories generated using the AMBER force field provided us with atomic-level understanding of the conformational variability of this inhibitor, which is discussed in the context of other experimental and theoretical data.