Graspetides, also known as ω-ester-containing peptides (OEPs), are a family of ribosomally synthesized and post-translationally modified peptides (RiPPs) bearing side chain-to-side chain macrolactone or macrolactam linkages. Here, we present the molecular details of precursor peptide recognition by the macrocyclase enzyme PsnB in the biosynthesis of plesiocin, a group 2 graspetide. Biochemical analysis revealed that, in contrast to other RiPPs, the core region of the plesiocin precursor peptide noticeably enhanced the enzyme–precursor interaction via the conserved glutamate residues. We obtained four crystal structures of symmetric or asymmetric PsnB dimers, including those with a bound core peptide and a nucleotide, and suggest that the highly conserved Arg213 at the enzyme active site specifically recognizes a ring-forming acidic residue before phosphorylation. Collectively, this study provides insights into the mechanism underlying substrate recognition in graspetide biosynthesis and lays a foundation for engineering new variants.