The emergence of drug-resistant pathogens such as staphylococci and enterococci in the hospital setting has long being recognized as a serious clinical problem. Staphylococcus aureus is the causative agent of many nosocomial infections from minor skin abscesses to serious, potentially life threatening diseases such as bone and soft tissue intra-surgical infections, sepsis and invasive endocarditis, while enterococci are responsible for nosocomial bacteraemia, surgical wound infections and endocarditis. The most infamous drug-resistant forms of these include MRSA (methicillin resistant S. aureus), VISA (vancomycin insensitive S. aureus), hVISA (heterogenous vancomycin insensitive S. aureus) and VRE (vancomycin resistant S. aureus). While enhanced hygiene awareness is essential to any solution, the identification of effective novel antimicrobial compounds remains a major goal in eradicating these and other infections caused by multi-drug resistant pathogens. In recent years a class of antimicrobial peptides, the Lantibiotics, have been the focus of an ever increasing level of attention. This interest has been prompted by an enhanced appreciation of the mode of action of these peptides (including, in many cases, the ability to bind lipid II) and their frequently high levels of antimicrobial activity. Here we review lantibiotic- related issues in drug discovery, outline the strategies that have been employed to identify these peptides and summarize the use of bioengineering to generate enhanced forms of these peptides as well as the application of the associated biological machinery to generate novel forms of existing pharmaceutical compounds. In so doing we highlight how some, or all, of these approaches have the potential to result in the development of clinically important drugs.