Clan C1A or ‘papain superfamily’ cysteine proteases are key players in many important physiological processes and diseases in most living systems. Novel approaches towards the development of their inhibitors can open new avenues in translational medicine. Here, we report a novel design of a re-engineered chimera inhibitor Mco-cysteine protease inhibitor (CPI) to inhibit the activity of C1A cysteine proteases. This was accomplished by grafting the cystatin first hairpin loop conserved motif (QVVAG) onto loop 1 of the ultrastable cyclic peptide scaffold McoTI-II. The recombinantly expressed Mco-CPI protein was able to bind with micromolar affinity to papain and showed remarkable thermostability owing to the formation of multi-disulphide bonds. Using an in silico approach based on homology modelling, protein–protein docking, the calculation of the free-energy of binding, the mechanism of inhibition of Mco-CPI against representative C1A cysteine proteases (papain and cathepsin L) was validated. Furthermore, molecular dynamics simulation of the Mco-CPI–papain complex validated the interaction as stable. To conclude, in this McoTI-II analogue, the specificity had been successfully redirected towards C1A cysteine proteases while retaining the moderate affinity. The outcomes of this study pave the way for further modifications of the Mco-CPI design for realizing its full potential in therapeutics. This study also demonstrates the relevance of ultrastable peptide-based scaffolds for the development of novel inhibitors via grafting. © 2020 by the authors. Licensee MDPI, Basel, Switzerland.