The creation of highly hindered peptides that contain combinations of non-natural N-alkyl amino acids and N-alkyl-alpha, alpha-disubstituted amino acids presents a formidable challenge. Hindered, non-natural amino acids are of interest because they import resistance to proteolysis and unusual conformational properties to peptides that contain them. Toward a solution to this problem, we describe a new approach to creating extremely hindered dipeptides that is operationally simple and uses mild conditions and commercially available amino acids. The approach reduces the need for protecting groups and yields urethane-protected dipeptide acids that can be used as building blocks in the synthesis of larger peptides. We propose that the reaction proceeds through a previously unexploited intramolecular O,N-actyl transfer pathway.