We review drug conjugates combining a tumor-selective moiety with a cytotoxic agent as cancer treatments. Currently, antibody-drug conjugates (ADCs) are the most common drug conjugates used clinically as cancer treatments. While providing both efficacy and favorable tolerability, ADCs have limitations due to their size and complexity. Peptides as tumor-targeting carriers in peptide-drug conjugates (PDCs) offer a number of benefits. Melphalan flufenamide (melflufen) is a highly lipophilic PDC that takes a novel approach by utilizing increased aminopeptidase activity to selectively increase the release and concentration of cytotoxic alkylating agents inside tumor cells. The only other PDC approved currently for clinical use is Lu-177-dotatate, a targeted form of radiotherapy combining a somatostatin analog with a radionuclide. It is approved as a treatment for gastroenteropancreatic neuroendocrine tumors. Results with other PDCs combining synthetic analogs of natural peptide ligands with cytotoxic agents have been mixed. The field of drug conjugates as drug delivery systems for the treatment of cancer continues to advance with the application of new technologies. Melflufen provides a paradigm for rational PDC design, with a targeted mechanism of action and the potential for deepening responses to treatment, maintaining remissions, and eradicating therapy-resistant stem cells.