It is well known that the oral bioavailability of peptide and protein drugs is generally poor because they are extensively degraded by proteases in the gastrointestinal tract and impermeable through the intestinal mucosa. Therefore, various approaches have been examined to overcome the delivery problems of these peptides and to improve their absorption via the gastrointestinal tract. Of these approaches, a potentially useful approach to solve these delivery problems may be chemical modification of peptides and proteins to produce prodrugs and analogues. Thus, it is plausible that this approach may protect peptides against degradation by peptidases and other enzymes present at the mucosal barrier and renders the peptides and proteins more lipophilic, resulting in increased bioavailability. From these standpoints, we synthesized lipophilic derivatives of peptides and proteins such as thyrotropin-releasing hormone (TRH), tetragastrin (TG), calcitonin and insulin by chemical modification with fatty acids. The pharmacological activities of these derivatives were relatively high as compared with the native peptides. A significant increase in the intestinal absorption of these derivatives of peptides was observed in comparison with native peptides. Overall, the effects of acylation on the intestinal absorption of these peptides were more predominant in the large intestine than those in the small intestine. In addition, these derivatives were more stable than the parent peptides in homogenates of the various intestinal mucosae. We also examined the intestinal transport characteristics of TG and its acyl derivatives using Caco-2 cell monolayers in order to assess the contribution of enzymatic and transport barriers on their intestinal absorption. The degradation clearance of TG on the apical membrane was decreased by chemical modification with fatty acids. In addition, the permeability clearance of TG was improved by the acylation. On the other hand, the intestinal absorption of thyrotropin releasing hormone (TRH), which is transported by a carrier-mediated process, was also enhanced by chemical modification with lauric acid. In summary, this chemical modification approach may be useful to improve the intestinal absorption of peptide and protein drugs.