In recent years, a few asparaginyl endopeptidases (AEPs) from certain higher plants have been identified as efficient peptide ligases with wide applications in protein labeling and cyclic peptide synthesis. Recently, we developed a NanoLuc Binary Technology (NanoBiT)-based peptide ligase activity assay to identify more AEP-type peptide ligases. Herein, we screened 61 bamboo species from 16 genera using this assay and detected AEP-type peptide ligase activity in the crude extract of all tested bamboo leaves. From a popular bamboo species,Bambusa multiplex, we identified a full-length AEP-type peptide ligase candidate (BmAEP1) via transcriptomic sequencing. After its zymogen was overexpressed inEscherichia coliand self-activatedin vitro, BmAEP1 displayed high peptide ligase activity, but with considerable hydrolysis activity. After site-directed mutagenesis of its ligase activity determinants, the mutant zymogen of [G238V]BmAEP1 was normally overexpressed inE. coli, but failed to activate itself. To solve this problem, we developed a novel protease-assisted activation approach in which trypsin was used to cleave the mutant zymogen and was then conveniently removed via an ion-exchange chromatography. After the non-covalently bound cap domain was dissociated from the catalytic core domain under acidic conditions, the recombinant [G238V]BmAEP1 displayed high peptide ligase activity with much lower hydrolysis activity, and could efficiently catalyze inter-molecular protein ligation and intra-molecular peptide cyclization. Thus, the engineered bamboo-derived peptide ligase represents a novel tool for protein labeling and cyclic peptide synthesis.