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A series of 7,6- and 7,5-fused bicyclic thiazepinones and oxazepinones were generated and incorporated as conformationally restricted dipeptide surrogates in mercaptoacyl dipeptides. These compounds are potent inhibitors of angiotensin-converting enzyme (ACE) and neutral endopeptidase (NEP) both in vitro and in vivo. Compound 1a, a 7,6-fused bicyclic thiazepinone, demonstrated excellent blood pressure lowering in a variety of animal models characterized by various levels of plasma renin activity and significantly potentiated urinary sodium, ANP, and cGMP excretion in a cynomolgus monkey assay. On the basis of its potency and duration of action, compound 1a (BMS-186716) was advanced into clinical development for the treatment of hypertension and congestive heart failure.