The RiPP precursor recognition element (RRE) is a conserved domain found in many prokaryotic ribosomally synthesized and post-translationally modified peptide (RiPP) biosynthetic gene clusters (BGCs). RREs bind with high specificity and affinity to a recognition sequence within the N-terminal leader region of RiPP precursor peptides. Lasso peptide biosynthesis involves an RRE-dependent leader peptidase, which is discretely encoded or fused to the RRE as a di-domain protein. Here we leveraged thousands of predicted BGCs to define the RRE:leader peptidase interaction through evolutionary covariance analysis. Each interacting domain contributes a three-stranded β-sheet to form a hydrophobic β-sandwich-like interface. The bioinformatics-guided predictions were experimentally confirmed using proteins from discrete and fused lasso peptide BGC architectures. Support for the domain-domain interface derived from chemical shift perturbation, paramagnetic relaxation enhancement experiments, and rapid variant activity screening using cell-free biosynthesis. Further validation of selected variants was performed with purified proteins. We developed a p-nitroanilide-based leader peptidase assay to illuminate the role of RRE domains. Our data show that RRE domains play a dual function. RRE domains deliver the precursor peptide to the leader peptidase, and the rate is saturable as expected for a substrate. RRE domains also partially compose the elusive S2 proteolytic pocket that binds the penultimate threonine of lasso leader peptides. Because the RRE domain is required to form the active site, leader peptidase activity is greatly diminished when the RRE domain is supplied at substoichiometric levels. Full proteolytic activation requires RRE engagement with the recognition sequence-containing portion of the leader peptide. Together, our observations define a new mechanism for protease activity regulation.