The activity of papain (EC 188.8.131.52) decreases with increasing methanol concentration. At relatively low concentrations (2–4%), methanol, a few other solvents and urea (2 M) exhibit apparently competitive inhibition. However, the extent of inhibition by methanol and urea is not the same for the two substrates benzoylglycine ethyl ester and benzoylarginine ethyl ester. Partial methanolysis of benzoylarginine amide was observed in 30% methanol by a titration method. Methanol was a 5–6 times more effective nucleophile than water. In 50% methanol almost no activity remained. This loss of activity is believed not to be due to conformational change for the following reasons: (1) There was no change in optical rotatory dispersion up to 70% methanol. (2) There was no change in viscosity in 50% methanol. (3) Papain is an enzyme of unusual stability, since in 8 M urea it retains considerable activity and exhibits no essential change in optical rotatory dispersion. It is considered possible that the inhibitory effects are to a large extent due to interference with hydrophobic interactions between enzyme and substrates. Certain consequences for the X-ray analysis of papain crystals grown from water-methanol mixtures are pointed out.