Water soluble reagents and methods for the formation of an amide bond between a phosphinothioester and an azide in an aqueous medium. The phosphinothioester is generated using a water-soluble phosphinothiol reagent. This reaction allows formation of an amide bond between a wide variety of chemical species including amino acids, peptides or protein fragments in an aqueous solution. Of particular interest, this reaction allows for the formation of an amide bond in a physiological setting. In a specific embodiment, this invention provides reagents and methods for peptide ligation in an aqueous medium. The reaction eliminates the need for a cysteine residue and is traceless leaving no residual atoms in the ligated peptide product.