Cyclization is an important post-translational modification of peptides and proteins that confers key advantages such as protection from proteolytic degradation, altered solubility, membrane permeability, bioavailability, and especially restricted conformational freedom in water that allows the peptide backbone to adopt the major secondary structure elements found in proteins. Non-ribosomal synthesis in bacteria, fungi, and plants or synthetic chemistry can introduce unnatural amino acids and non-peptidic constraints that modify peptide backbones and side chains to fine-tune cyclic peptide structure. Structures can be potentially altered further upon binding to a protein in biological environments. Here we analyze three-dimensional crystal structures for 211 bioactive cyclic peptides bound to 65 different proteins. The protein-bound cyclic peptides were examined for similarities and differences in bonding modes, for main-chain and side-chain structure, and for the importance of polarity, hydrogen bonds, hydrophobic effects, and water molecules in interactions with proteins. Many protein-bound cyclic peptides show backbone structures like those (strands, sheets, turns, helices, loops, or distorted variations) found at protein-protein binding interfaces. However, the notion of macrocycles simply as privileged scaffolds that primarily project side-chain substituents for complementary interactions with proteins is dispelled here. Unlike small-molecule drugs, the cyclic peptides do not rely mainly upon hydrophobic and van der Waals interactions for protein binding; they also use their main chain and side chains to form polar contacts and hydrogen bonds with proteins. Compared to small-molecule ligands, cyclic peptides can bind across larger, polar, and water-exposed protein surface areas, making many more contacts that can increase affinity, selectivity, biological activity, and ligand-receptor residence time. Cyclic peptides have a greater capacity than small-molecule drugs to modulate protein-protein interfaces that involve large, shallow, dynamic, polar, and water-exposed protein surfaces.