Significance The authors report the development of a peptide sequence as a catalyst for aminoacyl transfer of thioesters. The influence of active site juxtaposing amino acid moieties was investigated. Beneficial effects of His and Asp in peptide 1 were observed. With Phe-thioester 2 as substrate, the aminoacyl transfer reaction via dipeptide assembly (see 3 ) led to the cyclized DKP product 4 in 35% yield (31% of non-cyclized steady-state dipeptide 5 ). With different substrates the yield of diketopiperazines 4 could be increased up to 85%.