In the last few decades, peptides have been victorious over small molecules as therapeutics due to their broad range of applications, high biological activity, and high specificity. However, the main challenges to overcome if peptides are to become effective drugs is their low oral bioavailability and instability under physiological conditions. Cyclic peptides play a vital role in this context because they show higher stability under physiological conditions, higher membrane permeability, and greater oral bioavailability than that of their corresponding linear analogues. In this regard, cyclic antimicrobial peptides (AMPs) have gained considerable attention in the field of novel antibiotic development. Bacterial strains produce cyclic AMPs through two pathways: ribosomal and nonribosomal. This review provides an overview of the chemical classification of cyclic AMPs isolated from bacteria, and provides a description of their biological activity and mode of action.