Although not complying with Lipinski's rule, peptides are to an increasing extent being developed into new active pharmaceutical ingredients. This is mainly due to novel application routes, formulations and chemical modifications, which confer on the peptides improved uptake and increased metabolic stability. A brief survey of currently approved peptide drugs and the present scope of the application of peptides as drugs is provided. Cyclic peptides are emerging as an interesting class of peptides with conformational rigidity and homogeneity, high receptor affinity and selectivity, increased metabolic stability and - in special cases - even oral availability. Challenges and new methodology for the synthesis of cyclic peptides are outlined and an overview of approaches toward the design of peptide conformation and peptide modification by nonproteinogenic building blocks is given.