Cyclodipeptide synthases form cyclodipeptides from two aminoacyl transfer RNAs. They use a ping-pong mechanism that begins with transfer of the aminoacyl moiety of the first aminoacyl tRNA onto a conserved serine, yielding an aminoacyl enzyme. Combining X-ray crystallography, site-directed mutagenesis and affinity labelling of the cyclodipeptide synthase AlbC, we demonstrate that the covalent intermediate reacts with the aminoacyl moiety of the second aminoacyl tRNA, forming a dipeptidyl enzyme, and identify the aminoacyl-binding sites of the aminoacyl tRNAs.