Peptides and peptidomimetics often exhibit poor oral bioavailability due to their metabolic instability and low permeation across the intestinal mucosa. N-Methylation has been used successfully in peptide-based drug design in an attempt to improve the metabolic stability of a peptide-based lead compound. However, the effect of N-methylation on the absorption of peptides through the intestinal mucosa is not well understood, particularly when transporters, i.e. the oligopeptide transporter (OPT) and P-glycoprotein (P-gp), modulate the passive diffusion of these types of molecules. To examine this, terminally free and terminally modified (N-acetylated and C-amidated) analogs of H-Ala-Phe-Ala-OH with N-methyl groups on either the Ala-Phe or Phe-Ala peptide bond were synthesized. Transport studies using Caco-2 cell monolayers, an in vitro model of the intestinal mucosa, showed that N-methylation of the Ala-Phe peptide bond of H-Ala-Phe-Ala-OH stabilized the molecule to protease degradation, and the resulting analog exhibited significant substrate activity for OPT. However, N-methylation of the Phe-Ala peptide bond of H-Ala-Phe-Ala-OH did not stabilize the molecule to protease degradation, and the substrate activity of the resulting molecule for OPT could not be determined. Interestingly, N-methylation of the Phe-Ala peptide bond of the terminally modified tripeptide Ac-Ala-Phe-Ala-NH2 decreased the substrate activity of the molecule for the efflux transporter P-gp. In contrast, N-methylation of the Ala-Phe peptide bond of the terminally modified tripeptide Ac-Ala-Phe-Ala-NH2 increased the substrate activity of the molecule for P-gp.