Covering: 1994 to 2002 The ability to synthesize nonribosomally small bioactive peptides that find application in modern medicine is widely spread among microorganisms. As broad as the spectrum of biological activities is the structural diversity of these peptides, which are mostly cyclic or branched cyclic compounds containing non-proteinogenic amino acids, small heterocyclic rings and other unusual modifications in the peptide backbone. They are synthesized by multimodular enzymes, the so-called nonribosomal peptide synthetases (NRPSs), from simple building blocks. Biochemical and genetic studies have unveiled the key principles of nonribosomal peptide syntheses, as well as the realization of many structural features of these peptides. This review focuses on recent results in NRPS research and highlights how this knowledge can be exploited for biotechnological purposes. In addition, possibilities and limitations for prediction of structural features of uncharacterized NRPSs and approaches for their engineering are discussed.