α-Oxo aldehyde-based bioconjugation chemistry has been widely explored in peptide and protein modifications for various applications in biomedical research during the past decades. The generation of α-oxo aldehyde via sodium periodate oxidation is usually limited to the N-terminus of a target protein. Internal-site functionalization of proteins with the α-oxo aldehyde handle has not been achieved yet. Herein we report a novel method for site-specific peptide and protein modification using synthetically or genetically incorporated thiazolidine-protected α-oxo aldehyde. Efficient unmasking of the aldehyde was achieved by silver ion-mediated hydrolysis of thiazolidine under mild conditions for the first time. A model peptide and a recombinant protein were used to demonstrate the utility of this new method, which were site-specifically modified by oxime ligation with an oxyamine-functionalized peptide labeling reagent. Therefore, our current method has enriched the α-oxo aldehyde synthetic tool box in peptide and protein bioconjugation chemistry and holds great potential to be explored in novel applications in the future.