Peptides can operate as therapeutic agents that sit within a privileged space between small molecules and larger biologics. Despite examples of their potential to regulate receptors and modulate disease pathways, the development of peptides with drug-like properties remains a challenge. In the quest to optimize physicochemical parameters and improve target selectivity, unnatural amino acids (UAAs) have emerged as critical tools in peptide- and peptidomimetic-based drugs. The utility of UAAs is illustrated by clinically approved drugs such as methyldopa, baclofen, and gabapentin in addition to small drug molecules, for example, bortezomib and sitagliptin. In this Perspective, we outline the strategy and deployment of UAAs in FDA-approved drugs and their targets. We further describe the modulation of the physicochemical properties in peptides using UAAs. Finally, we elucidate how these improved pharmacological parameters and the role played by UAAs impact the progress of analogs in preclinical stages with an emphasis on the role played by UAAs.