The suite of currently used drugs can be divided into two categories - traditional 'small molecule' drugs with typical molecular weights of 5000 Da that are not orally bioavailable and need to be delivered via injection. Due to their small size, conventional small molecule drugs may suffer from reduced target selectivity that often ultimately manifests in human side-effects, whereas protein therapeutics tend to be exquisitely specific for their targets due to many more interactions with them, but this comes at a cost of low bioavailability, poor membrane permeability, and metabolic instability. The time has now come to reinvestigate new drug leads that fit between these two molecular weight extremes, with the goal of combining advantages of small molecules (cost, conformational restriction, membrane permeability, metabolic stability, oral bioavailability) with those of proteins (natural components, target specificity, high potency). This article uses selected examples of peptides to highlight the importance of peptide drugs, some potential new opportunities for their exploitation, and some difficult challenges ahead in this field. © 2012 John Wiley & Sons A/S.