This review describes the structure and function of prolyl endopeptidase (PEP) enzymes and how they are being evaluated as drug targets and therapeutic agents. The most well studied PEP family has a two-domain structure whose unique seven-blade beta-propeller domain works with the catalytic domain to hydrolyze the peptide bond on the carboxyl side of internal proline residues of an oligopeptide substrate. Structural and functional studies on this protease family have elucidated the mechanism for peptide entry between the two domains. Other structurally unrelated PEPs have been identified, but have not been studied in detail. Human PEP has been evaluated as a pharmacological target for neurological diseases due to its high brain concentration and ability to cleave neuropeptides in vitro. Recently, microbial PEPs have been studied as potential therapeutics for celiac sprue, an inflammatory disease of the small intestine triggered by proline-rich gluten.