Class II lanthipeptides belong to a diverse group of natural products known as ribosomally synthesized and post-translationally modified peptides (RiPPs). Most RiPP precursor peptides contain an N-terminal recognition sequence known as the leader peptide, which is typically recognized by biosynthetic enzymes that catalyze modifications on the C-terminal core peptide. For class II lanthipeptides, these are carried out by a bifunctional lanthipeptide synthetase (LanM) that catalyzes dehydration and cyclization reactions on peptidic substrates to generate thioether-containing, macrocyclic molecules. Some lanthipeptide synthetases are extraordinarily substrate tolerant, making them promising candidates for biotechnological applications such as combinatorial biosynthesis and cyclic peptide library construction. In this study, we characterized the mode of leader peptide recognition by HalM2, the lanthipeptide synthetase responsible for the production of the antimicrobial peptide haloduracin β. Using NMR spectroscopic techniques, in vitro binding assays, and enzyme activity assays, we identified substrate residues that are important for binding to HalM2 and for post-translational modification of the peptide substrates. Additionally, we provide evidence of the binding site on the enzyme using binding assays with truncated enzyme variants, hydrogen-deuterium exchange mass spectrometry, and photoaffinity labeling. Understanding the mechanism by which lanthipeptide synthetases recognize their substrate will facilitate their use in biotechnology, as well as further our general understanding of how RiPP enzymes recognize their substrates.