The scope and utility of phage display is reviewed with emphasis on medical applications and structure-based ligand and drug design, from literature mostly after 1994. General principles by which phage-displayed peptides achieve affinity and selectivity for targets are described, along with selected structural or mechanistic studies of the binding of peptides or proteins discovered or engineered by phage display. Such engineered proteins whose wild-type or mutant crystal or 2D-NMR structures yield insight about the basis for enhanced affinity or altered specificity include antibodies, zinc fingers, human growth hormone, protein A, and atrial natriuretic peptide. Structures of complexes of de novo phage-discovered peptide ligands with targets such as the Src SH3 domain, streptavidin, and erythropoietin receptor reveal the structural basis for receptor-peptide recognition in these systems.