Lipidation is a posttranslational modification of proteins that has also found its use in designing peptide drugs. The presence of a lipid group in peptides modulates their hydrophobicity, secondary structures and self-assembling propensities while retaining their abilities to bind to target receptors. Lipidation improves peptides' metabolic stability, membrane permeability, bioavailability, and changes peptides' pharmacokinetic and pharmacodynamic properties. Herein, we review the applications of various lipidation strategies in peptide drug design, the effects of the chain length and anchor position of fatty acids in peptide lipidation, the physicochemical and biological properties of selected lipidated peptides and the synthesis strategies for peptide lipidation.