L-Alanyl-L-glutamine (Ala-Gln) is a widely used value-added dipeptide whose production relies heavily upon an efficient biocatalyst. The currently available yeast biocatalysts that express α-amino acid ester acyltransferase (SsAet) possess relatively low activity, which may be attributed to glycosylation. Here, to promote SsAet activity in yeast, we identified the Nglycosylation site as the Asn residue at position 442 and subsequently eliminated the negative effect of N-glycosylation on SsAet by removing artificial and native signal peptides to obtain K3A1, a novel yeast biocatalyst with significantly improved activity. Additionally, the optimal reaction conditions of strain K3A1 were determined (25 °C, pH 8.5, AlaOMe/Gln = 1:2), resulting in a maximum molar yield and productivity of approximately 80% and 1.74 g•(L•min) −1 , respectively. Therefore, we developed a promising system to cleanly produce Ala-Gln in a safe, efficient, and sustainable manner, which may contribute to the future industrial production of Ala-Gln.