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Background: Complement factor D (FD) is the rate-limiting enzyme of the alternative complement pathway. Previous reports of FD deficiency featured absent plasma FD (type I deficiency) and susceptibility to meningococcal infection. A new FD mutant, which is non-functional but fully expressed, was identified in a patient with invasive meningococcal disease. Objectives: We sought to investigate the molecular features of this novel FD mutant. Methods: We performed complement haemolytic assays, western blot analysis of serum FD and Sanger sequencing of the CFD gene. Recombinant mutant FD was assessed by in vitro catalytic assays, circular dichroism, thermal shift assays, esterolytic assays and surface plasmon resonance. Molecular dynamics simulation was used to visualise the structural changes in mutant FD. Results: A homozygous single-nucleotide variation of the CFD gene in the patient and their sibling resulted in an arginine to proline (R176P) substitution in FD. While R176P FD was stable and fully expressed in blood, it had minimal catalytic activity. Mutation R176P caused key FD-C3bB binding exosite loop 156-162 to lose its binding-competent conformation and stabilised the inactive conformation of FD. Consequently, R176P FD was unable to bind its natural substrate, C3bB. Neither patient nor sibling demonstrated the glucose homeostasis impairment that occurs in FD-null mice. Conclusions: Here, we report the first genetically confirmed functional, or type III, deficiency of an activating complement serine protease. This novel mechanism of FD inhibition can inform further development of alternative pathway inhibitors to treat common inflammatory diseases such as age-related macular degeneration.