Oligosaccharyltransferase (OST) is a key enzyme of the N-glycosylation pathway, where it catalyzes the transfer of a glycan from a lipid-linked oligosaccharide (LLO) to an acceptor asparagine within the conserved sequon N-X-T/S. A previous structure of a ternary complex of bacterial single subunit OST, PglB, bound to a non-hydrolyzable LLO analog and a wild type acceptor peptide showed how both substrates bind and how an external loop (EL5) of the enzyme provided specific substrate-binding contacts. However, there was a relatively large separation of the substrates at the active site. Here we present the X-ray structure of PglB bound to a reactive LLO analog and an inhibitory peptide, revealing previously unobserved interactions in the active site. We found that the atoms forming the N-glycosidic bond (C-1 of the GlcNAc moiety of LLO and the -NH2 group of the peptide) are closer than in the previous structure, suggesting that we have captured a conformation closer to the transition state of the reaction. We find that the distance between the divalent metal ion and the glycosidic oxygen of LLO is now 4 Å, suggesting that the metal stabilizes the leaving group of the nucleophilic substitution reaction. Further, the carboxylate group of a conserved aspartate of PglB mediates an interaction network between the reducing-end sugar of the LLO, the asparagine side chain of the acceptor peptide, and a bound divalent metal ion. The interactions identified in this novel state are likely to be relevant in the catalytic mechanisms of all OSTs.