Transglutaminases (TGases) catalyse the transamidation of glutamine residues with primary amines. Herein we report the first FRET-based activity assay for the direct detection of the ligation (transamidation) reaction mediated by tissue TGase (TG2). This novel assay was then used in a microtiter plate-based screen of a library of 18 potential amine substrates. From this screen it was discovered that propargyl amine serves as an excellent substrate for TG2. Subsequently, propargyl amine and 2-azidoethyl amine were validated independently as TG2 substrates with K_M values of 44 ± 4 μM, and 0.99 ± 0.06 mM, respectively. In a proof-of-principle protein labelling experiment, the protein casein was selectively functionalized with propargyl amine using TG2 and subsequently fluorescently labelled through a dipolar cycloaddition reaction with an azido–fluorescein conjugate. This application demonstrates the strong potential of using TG2 for site-specific protein modification through a combination of enzymatic and bioorthogonal chemistry.