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Broad-spectrum amino acid racemases (Bsrs) enable bacteria to generate non-canonical D-amino acids (NCDAAs), whose roles and impact on microbial physiology, including modulation of cell wall structure and dissolution of biofilms, are just beginning to be appreciated. Here we used a diverse array of structural, biochemical and molecular simulation studies to define and characterize how BsrV is post-translationally regulated. We discovered that contrary to Vibrio cholerae alanine racemase AlrV highly compacted active site, BsrV’s is broader and can be occupied by cell wall stem peptides. We found that peptidoglycan peptides modified with NCDAAs are better stabilized by BsrV’s catalytic cavity and show better inhibitory capacity than canonical muropeptides. Notably, BsrV binding and inhibition can be recapitulated by undigested peptidoglycan sacculi as it exists in the cell. Docking simulations of BsrV binding the peptidoglycan polymer generate a model where the peptide stems are perfectly accommodated and stabilized within each of the dimeŕs active sites. Taking these biochemical and structural data together, we propose that inhibition of BsrV by peptidoglycan peptides underlies a negative regulatory mechanism to avoid excessive NCDAA production. Our results collectively open the door to use “à la carte” synthetic peptides as a tool to modulate DAAs production of Bsr enzymes.