Peptide antibiotics are known to contain non-protein amino acids, D-amino acids, hydroxy acids, and other unusual constituents. In addition they may be modified by N-methylation and cyclization reactions. Their biosynthetic origin has been connected in many cases to an enzymatic system referred to as the 'thiotemplate multienzymic mechanism'. This mechanism includes the activation of the constituent residues as adenylates on the enzymic template, the acylation of specific template thiol groups, epimerization or N-methylation at this thioester stage, and polymerization in the sequence directed by the multienzymic structure with the aid of 4'-phosphopantetheine as a cofactor, including possible cyclization or terminal modification reactions. The reaction sequences leading to gramicidin S, tyrocidine, cyclosporine, bacitracin, polymyxin, actinomycin, enniatin, beauvericin, delta-(L-alpha-aminoadipyl)-L-cysteinyl-D-valine and linear gramicidin are discussed. The structures of the multienzymes, their genetic organization, the biological functions of these peptides and results on related systems are discussed.