Dipeptide synthesis by aminopeptidase from Streptomyces septatus TH-2 (SSAP) was demonstrated using free amino acid as an acyl donor and aminoacyl methyl ester as an acyl acceptor in 98% methanol (MeOH). SSAP retained its activity after more than 100 h in 98% MeOH, and in the case of phenylalanyl-phenylalanine methyl ester synthesis, the enzyme reaction reached equilibrium when more than 50% of the free phenylalanine was converted to the product. In an investigation of the specificity of SSAP toward acyl donors and acyl acceptors, SSAP showed a broad specificity toward various free amino acids and aminoacyl methyl esters. Furthermore, we applied SSAP to the synthesis of several biologically active peptides, such as aspartyl-phenylalanine, alanyl-tyrosine, and valyl-tyrosine methyl esters.