Developing short peptides into useful probes and therapeutic leads remains a difficult challenge. Structural rigidification is a proven method for improving the properties of short peptides. In this work, we report a strategy for stabilizing peptide macrocycles by introducing side-chain-to-side-chain staples, producing peptide bicycles with higher affinity, selectivity, and resistance to degradation. We have applied this strategy to G1, an 11-residue peptide macrocycle that binds the Src homology 2 (SH2) domain of growth-factor-bound protein 2 (Grb2). Several homodetic peptide bicycles were synthesized entirely on-resin with high yields. Two rounds of iterative design produced peptide bicycle BC1, which is 60-fold more potent than G1 and 200-fold more selective. Also, BC1 is completely intact after 24 hours in buffered human serum, conditions under which G1 is completely degraded. Our peptide bicycle approach holds promise for the development of selective inhibitors of SH2 domains and other pTyr-binding proteins, as well as inhibitors of many other protein-protein interactions.