ABSTRACT Transmembrane protease, serine 2 (TMPRSS2) has been identified as key host cell factor for viral entry and pathogenesis of SARS-coronavirus-2 (SARS-CoV-2). Specifically, TMPRSS2 proteolytically processes the SARS-CoV-2 Spike (S) Protein, enabling virus-host membrane fusion and infection of the lungs. We present here an efficient recombinant production strategy for enzymatically active TMPRSS2 ectodomain enabling enzymatic characterization, and the 1.95 Å X-ray crystal structure. To stabilize the enzyme for co-crystallization, we pre-treated TMPRSS2 with the synthetic protease inhibitor nafamosat to form a stable but slowly reversible (15 hour half-life) phenylguanidino acyl-enzyme complex. Our study provides a structural basis for the potent but non-specific inhibition by nafamostat and identifies distinguishing features of the TMPRSS2 substrate binding pocket that will guide future generations of inhibitors to improve selectivity. TMPRSS2 cleaved recombinant SARS-CoV-2 S protein ectodomain at the canonical S1/S2 cleavage site and at least two additional minor sites previously uncharacterized. We established enzymatic activity and inhibition assays that enabled ranking of clinical protease inhibitors with half-maximal inhibitory concentrations ranging from 1.7 nM to 120 μM and determination of inhibitor mechanisms of action. These results provide a body of data and reagents to support future drug development efforts to selectively inhibit TMPRSS2 and other type 2 transmembrane serine proteases involved in viral glycoprotein processing, in order to combat current and future viral threats. SUMMARY PARAGRAPH Viruses hijack the biochemical activity of host proteins for viral invasion and replication. Transmembrane protease, serine-2 (TMPRSS2) is a surface-expressed protease implicated in the activation of influenza A, influenza B, and coronaviruses, including SARS-CoV-2, to drive efficient infection of the lungs 1–5 . TMPRSS2 is an attractive target for antiviral therapies, as inhibiting its proteolytic activity blocks efficient viral entry 5,6 . However, a structural and biochemical understanding of the protease has remained elusive and no selective inhibitors are available. We engineered on-demand activatable TMPRSS2 ectodomain and determined the 1.95 Å X-ray crystal structure of the stabilized acyl-enzyme after treatment with nafamostat, a protease inhibitor under investigation as a COVID-19 therapeutic. The structure reveals unique features of the TMPRSS2 substrate recognition pocket and domain architecture, and explains the potent, but nonselective inhibition by nafamostat. TMPRSS2 efficiently cleaved the SARS-CoV-2 S protein at the canonical S1/S2 site as well as two minor sites previously uncharacterized. We further established a robust enzymatic assay system and characterized inhibition by two additional clinical protease inhibitors under study for COVID-19, camostat and bromhexine. Our results provide a body of data and reagents to enable ongoing drug development efforts to selectively inhibit TMPRSS2 and other TTSPs involved in viral glycoprotein processing, in order to combat current and future viral threats.