Lantibiotics are ribosomally synthesised, post-translationally modified antimicrobial peptides that exhibit activity against a wide-range of Gram positive bacteria. During the last decade a number of two-peptide lantibiotics, i.e. lantibiotics that function optimally as a consequence of the synergistic activity of two peptides, have been identified, six of which (lacticin 3147, staphylococcin C55, plantaricin W, Smb, BHT-A and haloduracin) are closely related. It has been established in at least one instance, i.e. lacticin 3147, that these are extremely potent antimicrobials, which are active at nanomolar concentrations against a number of microorganisms, exhibit activity against multidrug resistant nosocomial pathogens such as MRSA and VRE and significantly, to date the development of significant levels of resistance has not been apparent. Given the similarity between lacticin 3147 and related two-peptide lantibiotics, it is likely that they too possess similarly beneficial traits and thus could potentially have medical and veterinary applications. In addition to discussing these aspects of two-peptide lantibiotic research, this review will focus on new developments in this area pertaining to studies elucidating the mechanism of action of these antimicrobials, the use of bioengineering to reveal the location of essential and variable domains therein and the potential for the use of in vivo and in vitro engineering to create derivatives with even greater activities against specific target organisms.