Cystatins are endogenous inhibitors of mammalian lysosomal cysteine proteinases, such as cathepsins B, L, H, and S. Cystatin C belongs to the type 2 cystatin family. In this study, the 751-bp cystatin C cDNA (PoCystatin C) of olive flounder (Paralichthys olivaceus) was cloned by screening from the olive flounder cDNA library. The mRNA expression of the PoCystatin C gene was examined in various tissues from normal and lipopolysaccharide (LPS)-stimulated olive flounder by RT-PCR and was compared with inflammatory cytokines IL-1 beta, IL-6, and IL-8. PoCystatin C transcripts ubiquitously existed in all normal and LPS-stimulated tissues that were tested. The recombinant PoCystatin C protein was expressed in Escherichia coli BL21(DE3) in pCold (TM) TF DNA expression vector as a 70-kDa fusion protein. The protease inhibitory activities of recombinant PoCystatin C toward papain cysteine protease, piscine cathepsins (L, S, K, F, and X), and bovine cathepsin B were measured with the synthetic fluorogenic peptide substrates. PoCystatin C tightly inhibited papain cysteine protease, whereas cathepsins L, S, K, F, X, and B were inhibited with lower affinities. Our results indicate that the P. olivaceus cystatin C is a homolog of mammalian cystatin C due to its sequence, structure, tissue expression, and biochemical activity.