Papain (PA) immobilized onto magnetic nanocrystalline cellulose (PA@MNCC) was successfully fabricated and adopted as an efficient biocatalyst for the synthesis of N-(benzyloxycarbonyl)-alanyl-histidine (Z-Ala-His) dipeptide. Introducing deep eutectic solvents (DESs) as reaction media promoted the synthesis of the Z-Ala-His dipeptide. The effects of reaction conditions on the yield of papain catalytic Z-Ala-His were systematically investigated with the highest yield of 68.4%, which was higher than free papain (63.3%). Besides, this novel PA@MNCC composite can be easily recycled from the reaction system by magnetic forces. In a word, the PA@MNCC composite exhibited great potential for efficient biosynthesis of dipeptide in DESs.