Ghrelin O-acyltransferase (GOAT) plays a central role in the maturation and activation of the peptide hormone ghrelin, which performs a wide range of endocrinological signaling roles. Using a tight-binding fluorescent ghrelin-derived peptide designed for high selectivity for GOAT over the ghrelin receptor GHSR, we demonstrate that GOAT interacts with extracellular ghrelin and facilitates ligand cell internalization in both transfected cells and prostate cancer cells endogenously expressing GOAT. Coupled with enzyme mutagenesis, ligand uptake studies support the interaction of the putative histidine general base within GOAT with the ghrelin peptide acylation site. Our work provides a new understanding of GOAT's catalytic mechanism, establishes that GOAT can interact with ghrelin and other peptides located outside the cell, and raises the possibility that other peptide hormones may exhibit similar complexity in their intercellular and organismal-level signaling pathways.