Cyclic peptides have provided one of the most important platforms for exploration of biorelevant chemical space between small molecules and biologics. However, in comparison with the design and synthesis of small molecules, chemists' ability to fine-tune the three-dimensional structures and properties of cyclic peptides lag far behind. Intrigued by cyclophane peptide natural products, we wondered whether the rigid, planar, and hydrophobic cyclophane motif could provide a new design element for the synthesis of cyclic peptides with well-behaved 3D structures. Herein, we report a generally applicable method for synthesis of natural-product-like cyclophane-braced peptide macrocycles via Pd-catalyzed intramolecular C(sp3)-H arylation with aryl iodides at the remote γ position of various N-terminal aliphatic amino acid units using a simple picolinamide directing group. Products of high structural and stereochemical complexity were quickly assembled from easily accessible peptide precursors prepared by standard solid phase peptide synthesis. Many of these peptide macrocycles show highly ordered structures as revealed by X-ray crystallography. Remarkably, the PA-directed C(sp3)-H cyclization reaction of unprotected peptide substrates carrying various free polar side chains proceeded with high efficiency and selectivity in aqueous media. This demonstrates not only the synthetic utility of Pd-catalyzed C(sp3)-H functionalization reactions, but also offers a valuable new orthogonal reactivity for peptide chemistry.