Aspartyl dipeptidase (dipeptidase E) can hydrolyze Asp-X dipeptides (where X is any amino acid), and the enzyme plays a key role in the degradation of peptides as nutrient sources. Dipeptidase E remains uncharacterized in Streptomyces. Orf2 from Streptomyces sp. 139 is located in the exopolysaccharide biosynthesis gene cluster, which may be a novel dipeptidase E with “S134-H170-D198” catalytic triad by sequence and structure comparison. Herein, recombinant Orf2 was expressed in E. coli and characterized dipeptidase E activity using the Asp-ρNA substrate. The optimal pH and temperature for Orf2 are 7.5 and 40 ℃; Vmax and Km of Orf2 are 0.0787 mM·min−1 and 1.709 mM, respectively. Orf2 exhibits significant degradation activities to Asp-Gly-Gly, Asp-Leu, Asp-His, and isoAsp-Leu and minimal activities to Asp-Pro and Asp-Ala. Orf2 contains a Ser-His-Asp catalytic triad characterized by point mutation. In addition, the Asp147 residue of Orf2 is also proven to be critical for the enzyme’s activity through molecular docking and point mutation. Transcriptome analysis reveals the upregulation of genes associated with ribosomes, amino acid biosynthesis, and aminoacyl-tRNA biosynthesis in the orf2 mutant strain. Compared with the orf2 mutant strain and WT, the yield of crude polysaccharide does not change significantly. However, crude polysaccharides from the orf2 mutant strain exhibit a wider range of molecular weight distribution. The results indicate that the Orf2 links nutrient stress to secondary metabolism as a novel dipeptidase E.Key points• A novel dipeptidase E with a Ser-His-Asp catalytic triad was characterized from Streptomyces sp. 139.• Orf2 was involved in peptide metabolism both in vitro and in vivo.• Orf2 linked nutrient stress to mycelia formation and secondary metabolism in Streptomyces.