Macrocyclic peptides (MCPs) are an emerging class of promising drug modalities that can be used to interrogate hard-to-drug ("undruggable") targets. However, their poor intestinal stability is one of the major liabilities or obstacles for oral drug delivery. We therefore investigated the metabolic stability and biotransformation of MCPs via a systematic approach and established an integrated in vitro assay strategy to facilitate MCP drug discovery, with a focus on oral delivery liabilities. A group of diverse MCPs were incubated with representative matrices, including simulated intestinal fluid with pancreatin (SIFP), human enterocytes, liver S9 fractions, liver lysosomes, plasma, and recombinant enzymes. The results revealed that the stability and biotransformation of MCPs varied, with the major metabolic pathways identified in different matrices. Under the given conditions, the selected MCPs generally showed better stability in plasma compared to that in SIFP. Our data suggest that pancreatic enzymes act as the primary metabolic barrier for the oral delivery of MCPs, mainly through hydrolysis of their backbone amide bonds. Whereas in enterocytes, multiple metabolic pathways appeared to be involved and resulted in metabolic reactions such as oxidation and reduction in addition to hydrolysis. Further studies suggested that lysosomal peptidase cathepsin B could be a major enzyme responsible for the cleavage of side-chain amide bonds in lysosomes. Collectively, we developed and implemented an integrated assay for assessing the metabolic stability and biotransformation of MCPs for compound screening in the discovery stage toward oral delivery. The proposed question-driven assay cascade can provide biotransformation insights that help to guide and facilitate lead candidate selection and optimization.