Distinct streptomycetes such as Streptomyces mobaraensis produce the protein cross‐linking enzyme transglutaminase. Bioinformatic analysis predicted the occurrence of seven sortases exerting transpeptidation reactions similarly to transglutaminase. Here, we report the production and characterization of sortase E2 (Sm‐SrtE2) solubilized by removal of its membrane anchor domain. Sm‐SrtE2 activity was measured using pentapeptides predicted to be cell wall sorting signals of putative sortase substrate proteins. Preferred linkage to Gly3 by Sm‐SrtE2 was in the order LAETG>>LAHTG>>LAQTG~LANTG>LARTG. Chaplin 1 from S. mobaraensis was further demonstrated to be an excellent substrate of both the intrinsic Sm‐SrtE2 and transglutaminase. The unexpected discovery showing Gln‐62 and Gln‐65 of Δ1–50‐Sm‐SrtE2 as transglutaminase cross‐linking sites suggests that low enzyme stability might be due to anchor domain truncation and a disordered N terminus.