Proteases within the C1B hydrolase family are encoded by many organisms. We subjected a putative C1B-like cysteine protease secreted by the human gut commensal Parabacteroides distasonis to mass spectrometry-based substrate profiling to find preferred peptide substrates. The P. distasonis protease, which we termed Pd_dinase, has a sequential diaminopeptidase activity with strong specificity for N-terminal glycine residues. Using the substrate sequence information, we verified the importance of the P2 glycine residue with a panel of fluorogenic substrates and calculated kcat and KM for the dipeptide glycine-arginine-AMC. A potent and irreversible dipeptide inhibitor with a C-terminal acyloxymethyl ketone warhead, glycine-arginine- AOMK, was then synthesized and demonstrated that the Pd_dinase active site requires a free N-terminal amine for potent and rapid inhibition. We next determined the homohexameric Pd_dinase structure in complex with glycine-arginine- AOMK and uncovered unexpected active site features that govern the strict substrate preferences and differentiate this protease from members of the C1B and broader papain-like C1 protease families. We finally showed that Pd_dinase hydrolyzes several human antimicrobial peptides and therefore posit that this P. distasonis enzyme may be secreted into the extracellular milieu to assist in gut colonization by inactivation of host antimicrobial peptides.