The cathepsin B inhibitor surugamide B (2), along with structurally related derivatives (A and C-E), has previously been isolated from the marine actinomycete Streptomyces sp. JAMM992. The biosynthetic genes are unexpectedly part of a cluster of four non-ribosomal peptide synthetase (NRPS) genes, two of which are responsible for the biosynthesis of the additional linear decapeptide surugamide F. However, the thioesterase domain required for the later stage of the biosynthesis of the cyclic peptides surugamides A-E is not present in any module architecture of the surugamide NRPSs. Herein, we report the first total synthesis of surugamide B (2) through the macrocyclization at the biomimetic position, which not only alleviated the Cα epimerization in the macrolactamization process, but also efficiently provided 2 in 34 % yield for 18 steps. Furthermore, both the chemical and enzymatic studies with the biosynthetic precursor mimics revealed that the stand-alone enzyme SurE, which belongs to the penicillin-binding protein family, is responsible for macrocyclization of the tethered octapeptidyl intermediate.