The discovery of peptide hormones, growth factors and neuropeptides implicated in vital biological functions of our organism has increased interest in therapeutic use of short peptides. However, the development of peptides as clinically useful drugs is greatly limited by their poor metabolic stability and low bioavailability, which is due in part to their inability to readily cross membrane barriers such as the intestinal and blood-brain barriers. The aim of peptide medicinal chemistry is, therefore, to develop strategies to overcome these problems. Recent progress in chemical synthesis and design have resulted in several strategies for producing modified peptides and mimetics with lower susceptibility to proteolysis and improved bioavailability, which has increased the probability of obtaining useful drugs structurally related to parent peptides. This review describes different experimental approaches to transforming a peptide into a potential drug and provides examples of the usefulness of these strategies.