During their intraerythrocytic development, malaria parasites export hundreds of proteins to remodel their host cell. Nutrient acquisition, cytoadherence and antigenic variation are among the key virulence functions effected by this erythrocyte takeover. Proteins destined for export are synthesized in the endoplasmic reticulum (ER) and cleaved at a conserved (PEXEL) motif, which allows translocation into the host cell via an ATP-driven translocon called the PTEX complex. We report that plasmepsin V, an ER aspartic protease with distant homology to the mammalian processing enzyme BACE, recognizes the PEXEL motif and cleaves it at the correct site. This enzyme is essential for parasite viability and ER residence is essential for its function. We propose that plasmepsin V is the PEXEL protease and is an attractive enzyme for antimalarial drug development.