The emergence of peptide-drug conjugates (PDCs) that utilize target-oriented peptide moieties as carriers of cytotoxic payloads, interconnected with various cleavable/noncleavable linkers, resulted in the key-foundation of the new era of targeted therapeutics. They are capable of retaining the integrity of conjugates in the blood circulatory system as well as releasing the drugs at the tumor microenvironment. Other valuable advantages are specificity and selectivity toward targeted-receptors, higher penetration ability, and drug-loading capacity, making them a suitable candidate to play their vital role as promising carrier agents. In this review, we summarized the types of cell-targeting (CTPs) and cell-penetrating peptides (CPPs) that have broad applications in the advancement of targeted drug-delivery systems (DDS). Moreover, the techniques to overcome the limitations of peptide-chemistry for their extensive implementation to construct the PDCs. Besides this, the diversified breakthrough of linker chemistry, and ample knowledge of various cytotoxic payloads used in PDCs in recent years, as well as the mechanism of action of PDCs was critically discussed. The principal aim is to provide scattered and diversified knowledge in one place and to help researchers understand the pinching knots in the science of PDC development, also their progression toward a bright future for PDCs as novel theranostics in clinical practice.