Sensitive detection of small molecule fragments binding to defined sites of biomacromolecules is still a considerable challenge. Here we demonstrate that protein-binding fragments are able to induce enzymatic reactions on the protein surface via dynamic fragment ligation. Fragments binding to the S1 pocket of serine proteases containing a nitrogen, oxygen or sulphur nucleophile are found to activate electrophilic pre-substrates through a reversible, covalent ligation reaction. The dynamic ligation reaction positions the pre-substrate molecule at the active site of the protein thereby inducing its enzymatic cleavage. Catalytic activation of pre-substrates is confirmed by fluorescence spectroscopy and by high-performance liquid chromatography. The approach is investigated with 3 pre-substrates and 14 protein-binding fragments and the specific activation and the templating effect exerted by the enzyme is quantified for each protease-fragment-pre-substrate combination. The described approach enables the site-specific identification of protein-binding fragments, the functional characterization of enzymatic sites and the quantitative analysis of protein template-assisted ligation reactions.