Peptides containing thiazole fragments represent a large group of bioactive compounds with potential medicinal applications. However, methods for efficient synthesis of these compounds with structural diversity are limited. Herein, we report a method for modification and macrocyclization of thiazole-containing peptides through palladium-catalyzed δ-C(sp2)-H olefination. In this protocol, the thiazole and neighboring amide bonds act as directing groups, which allows site-specific olefination of phenylalanine, tryptophan and tyrosine residues. This chemistry exhibits broad substrate scope and provides facile access to peptide-peptide conjugates and peptide macrocycles. Our results highlight the potency and applicability of thiazole motifs in promoting Pd-catalyzed functionalization of peptides.