The O-N intramolecular acyl migration, also named as an acyl shift or acyl transfer reaction, is well-known in organic and peptide chemistry as a simple rearrangement which proceeds under very mild aqueous conditions. Despite a long history with this reaction, its application in medicinal chemistry has only lately been proposed. In the last decade, this reaction has been intensively studied and several applications of this rearrangement in medicinal chemistry have appeared. O-N Intramolecular acyl migration has been employed in "no auxiliary, no byproduct" prodrug strategies (prodrugs of paclitaxel and other taxoids, prodrugs of HIV protease inhibitors), for the synthesis of peptides containing difficult sequences via "O-acyl isopeptide method", including Alzheimer's disease related amyloid beta peptide (Abeta) 1-42, and in the design of pH-, photo- or enzyme-triggered click peptides, as a potential powerful tool for identifying the pathological functions of amyloid beta peptides in Alzheimer's disease. This review summarized recent advances in the application of O-N intramolecular acyl migration with special focus on medicinal chemistry.