PEGylation is considered one of the most successful techniques to improve the characteristics of protein drugs including to increase the circulating half-life of proteins in blood and to decrease their immunogenicity and antigenicity. One known PEG modification method is to attach PEG to the free amino group, typically at lysine residues or at the N-terminal amino acid with no selectivity, resulting in a heterogeneous product mixture. This lack of selectivity can present problems when a therapeutic PEGylated protein is being developed, because predictability of activity and manufacturing reproducibility are needed for regulatory approval. Enzymatic PEGylation of proteins is one route to overcome this limitation. Transglutaminases (TGase) are enzyme candidates for site-specific PEGylation. We use human interferon alpha 2a (IFN α2a) as a test case, and predict that the potential modification residues are Gln101 by computational approach as it contains 12 potential PEGylation sites. IFN α2a was PEGylated by Y shaped PEG40k-NH2 mediated by microbial transglutaminase. Our results show that the microbial transglutaminase mediated PEGylation of IFN α2a was site-specific only at the site of Gln101 in IFN α2a, yielding the single mono-conjugate PEG-Gln101-IFN α2a with a mass of 59 374.66 Da. Circular dichroism studies showed that PEG-Gln101-IFN α2a preserved the same secondary structures as native IFN α2a. As expected, the bioactivity and pharmacokinetic profile in rats of PEG-Gln101-IFN α2a revealed a significant improvement to unmodified IFN α2a, and better than PEGASYS.