Peptides labeled with radioactive 125I can be detected at the extremely low concentrations necessary for receptor binding studies and medical applications. Traditional methods of iodination often lead to inactive peptides due to excessive iodination, nonspecific iodination, or oxidative damage to the peptide. In this work these disadvantages are circumvented by labeling 127I containing peptides of a predetermined biological activity using a radioactive 125I exchange reaction with Na125I. Specific radioactivity up to 9.8 Ci/mmol was reached in a simple and efficient procedure.