This paper reviews basic rules for the design of site-selective prodrugs and various modes of their activation with particular emphasis on the applications of prodrugs to targeted delivery of radiopharmaceuticals. Although many radiopharmaceuticals are "targeted" to specific tissues or organs, we will discuss only agents that are either chemically or metabolically transformed producing an active form that is retained by its target. Site-specific prodrugs of diagnostic radiopharmaceuticals are routine in the nuclear medicine applications, but the instances of targeting of radiotherapeutic prodrugs are surprisingly rare. We have concentrated on our own efforts to design and synthesize site-selective prodrugs of 5-[125I]iodo-2'-deoxyuridine (125IUdR) for cancer radiotherapy. The prodrugs of 125IUdR for targeted delivery include several derivatives with altered permeability, 3',5'-dioctanoyl, 3',5'-dioleoyl, 3'- and 5'-N-alkyl-dihydropyridyl, 3'- and 5'-N-alkyl-dihydroisoquinolyl, and 3'- and 5'-N-alkyl-dihydroacridinyl esters of 125IUdR; polymeric and macromolecular prodrugs of 125IUdR for a carrier-mediated or local delivery; metabolically trapped 125IUdR prodrugs; and glycoconjugate prodrugs for oral colon-specific delivery of 125IUDR, 125IUDR-5'-beta-d-cellobioside, 125IUDR-5'-beta-D-glucopyranoside, 125IUDR-5'-beta-D-galactopyranoside and 125IUDR-5'-beta-D-glucuronide. We also describe prodrugs of several diagnostic agents in the context of the metabolic trapping as the primary targeting modality. For various diagnostic agents the prodrug target-associated enzymes are discussed and examples of the site-specific release of the active agent are given. A brief overview of an emerging role of residualizing labels in radioimmunotherapy is included.