Peptides and peptidomimetics can function as immunomodulating agents by either blocking the immune response or stimulating the immune response to generate tolerance. Knowledge of B- or T-cell epitopes along with conformational constraints is important in the design of peptide-based immunomodulating agents. Work on the conformational aspects of peptides, synthesis and modified amino acid side chains have contributed to the development of a new generation of therapeutic agents for autoimmune diseases and cancer. The design of peptides/peptidomimetics for immunomodulation in autoimmune diseases such as multiple sclerosis, rheumatoid arthritis, systemic lupus and HIV infection is reviewed. In cancer therapy, peptide epitopes are used in such a way that the body is trained to recognize and fight the cancer cells locally as well as systemically.