A 33-residue de novo designed peptide ligase is reported which catalyzes the template-directed condensation of suitably activated short peptides with catalytic efficiencies in excess of 10(5) ([k(cat)/K(m)]/k(uncat)). The ligase peptide, derived from natural and designed alpha-helical coiled-coil proteins, presents a surface for substrate assembly via formation of a hydrophobic core at the peptide interface. Charged residues flanking the core provide additional binding specificity through electrostatic complementarity. Addition of the template to an equimolar fragment solution results in up to 4100-fold increases in initial reaction rates. Dramatic decreases in efficiency upon mutation of charged residues or increase in ionic strength establishes the importance of electrostatic recognition to ligase efficiency. Although most of the increase in reaction efficiency is due to entropic gain from binding of substrates in close proximity, mechanistic studies with altered substrates demonstrate that the system is highly sensitive to precise ordering at the point of ligation. Taken together these results represent the first example of a peptide catalyst with designed substrate binding sites which can significantly accelerate a bimolecular reaction and support the general viability of alpha-helical protein assemblies in artificial enzyme design.