Membrane-bound serine proteases play important roles in different biological processes. Their regulation by endogenous inhibitors is poorly understood. A Y163C mutation in the SPINT2 gene encoding the serine protease inhibitor Hepatocyte Growth Factor Inhibitor HAI-2 is associated with a congenital sodium diarrhea. The functional consequences of this mutation on HAI-2 activity and its physiological targets are unknown. We established a cellular assay in Xenopus laevis oocytes to study functional interactions between HAI-2 and candidate membrane-bound serine proteases expressed in the gastro-intestinal tract. We found that the wild-type form of HAI-2 is a potent inhibitor of nine gastro-intestinal serine proteases. The Y163C mutation in the second Kunitz domain of HAI-2 resulted in a complete loss of inhibitory activity on two intestinal proteases, prostasin and tmprss13. The effect of the mutation of the homologous Y68C in the first Kunitz domain of HAI-2 is consistent with a differential contribution of the two Kunitz domains of HAI-2 in the inhibition of serine proteases. By contrast to the Tyr to Cys, the Tyr to Ser substitution did not change the inhibitory potency of HAI-2, indicating that the thiol-group of the cysteine rather than the Tyr deletion is responsible for the HAI-2 loss of function. Our functional assay allowed us to identify membrane-bound serine proteases as cellular target for inhibition by HAI-2 wild type and mutants, and to better define the role of the Tyr in the second Kunitz domain in the inhibitory activity of HAI-2.