Cystatins are classical competitive inhibitors of C1 family cysteine proteases (papain family). Phytocystatin superfamily shares high sequence homology and typical tertiary structure with conserved glutamine-valine-glycine (Q-X-V-X-G) loop blocking the active site of C1 proteases. Here, we develop a cysteine-bounded cyclic peptide (CYS-cIHL) and linear peptide (CYS-IHL), using the conserved inhibitory hairpin loop amino acid sequence. Using an in silico approach based on modeling, protein–peptide docking, molecular dynamics simulations and calculation of free energy of binding, we designed and validated inhibitory peptides against falcipain-2 (FP-2) and -3 (FP-3), cysteine proteases from the malarial parasite Plasmodium falciparum. Falcipains are critical hemoglobinases of P. falciparum that are validated targets for the development of antimalarial therapies. CYS-cIHL was able to bind with micromolar affinity to FP-2 and modulate its binding with its substrate, hemoglobin in in vitro and in vivo assays. CYS-cIHL could effectively block parasite growth and displayed antimalarial activity in culture assays with no cytotoxicity towards human cells. These results indicated that cyclization can substantially increase the peptide affinity to the target. Furthermore, this can be applied as an effective strategy for engineering peptide inhibitory potency against proteases. © 2020 Informa UK Limited, trading as Taylor & Francis Group.