A mild and efficient method for the conversion of C-terminal esters of side-chain protected peptides into an amide function via enzyme-catalysed ammonolysis in organic media with low water content is described. Subtilisin A, the alkaline serine protease from Bacillus licheniformis, was used as biocatalyst and ammonium carbamate as source of ammonia. Response surface methodology (RSM) and central composite design were employed to estimate the effects of reaction parameters such as molar ratio of ammonia source to peptide methyl ester (2:1–10:1), composition of the solvent system (ButOH/DMF, % v/v, 70:30–95:5) and water concentration (0.2–0.8%) at different temperatures (30–50 °C) for the preparation of Z-Ala-Phe-NH2 starting from Z-Ala-Phe-OMe. Optimum reaction conditions for maximum amide yield and minimum secondary hydrolysis were determined from cross-section analysis: temperature 30 °C, solvent composition ButOH/DMF 82.5:17.5 (v/v) containing 0.2% water (v/v) and molar ratio of ammonia source to peptide methyl ester of 10:1. The maximum yield of Z-Ala-Phe-NH2 was 87% after 21 h for a quantitative substrate conversion. The method proved to be generally applicable for the synthesis of C-terminal amides of dipeptides with different terminal amino acids and sequence.