The apical membrane of small intestinal enterocytes possess an uptake system for di- and tripeptides. The physiological function of the system is to transport small peptides resulting from digestion of dietary protein. Moreover, due to the broad substrate specificity of the system, it is also capable of transporting a number of orally administered peptidomimetic drugs. Absorbed peptides may be hydrolysed in the cells due to the high peptidase activity present in the cytosol. Peptidomimetic drugs may, if resistant to the cellular enzyme activity, pass the basolateral membrane via a basolateral peptide transport mechanism and enter the systemic circulation. As the number of new peptide and peptidomimetic drugs are rapidly increasing, the peptide transport system has gained increasing attention as a possible drug delivery system for small peptides and peptide-like compounds. In this paper we give an updated introduction to the transport system and discuss the substrate characteristics of the di/tri-peptide transporter system with special emphasis on chemically modified substrates and prodrugs.