With the development of modern chemistry and biology, non-proteinogenic amino acids (NPAAs) have become a powerful tool for developing peptide-based drug candidates. Drug-like properties of peptidic medicines, due to the smaller size and simpler structure compared to large proteins, can be changed fundamentally by introducing NPAAs in its sequence. While peptides composed of natural amino acids can be used as drug candidates, the majority have shown to be less stable in biological conditions. The impact of NPAA incorporation can be extremely beneficial in improving the stability, potency, permeability, and bioavailability of peptide-based therapies. Conversely, undesired effects such as toxicity or immunogenicity should also be considered. The impact of NPAAs in the development of peptide-based therapeutics is reviewed in this article. Further, numerous examples of peptides containing NPAAs are presented to highlight the ongoing development in peptide-based therapeutics.