AbstractColibactin, a DNA cross-linking agent produced by gut bacteria, is implicated in colorectal cancer. Its biosynthesis uses a prodrug resistance mechanism: a non-toxic precursor assembled in the cytoplasm is activated after export to the periplasm. This activation is mediated by ClbP, an inner-membrane peptidase with an N-terminal periplasmic catalytic domain and a C-terminal three-helix transmembrane domain. Although the transmembrane domain is required for colibactin activation, its role in catalysis is unclear. Our structure of full-length ClbP bound to a product analog reveals an interdomain interface important for substrate binding and enzyme stability and interactions that explain the selectivity of ClbP for the N-acyl-d-asparagine prodrug motif. Based on structural and biochemical evidence, we propose that ClbP dimerizes to form an extended substrate-binding site that can accommodate a pseudodimeric precolibactin with its two terminal prodrug motifs in the two ClbP active sites, thus enabling the coordinated activation of both electrophilic warheads.