Enzymatically formed peptides show positional variations as well as highly conserved amino acids. In the cases of gramicidin S, tyrocidine, linear gramicidins, enniatins, echinocandins and viridogrisein in vivo and in vitro studies indicate substrate selection at the level of amino acid activation as a major control step. Evidence for proof-reading steps beyond activation has been obtained in penicillin and cyclosporin biosynthesis. Activated substrate analogues may promote the formation of side products such as dipeptides and cyclodipeptides. Modifications of intermediates, such as N-methylation, influence the rates of peptide synthesis. These control steps pose limitations for the application of such enzyme systems in the production of peptide libraries. They may originate from a target oriented evolution of these synthetases.