A stepwise approach for reducing the size of a polypeptide hormone, atrial natriuretic peptide (ANP), from 28 residues to 15 while retaining high biopotency is described. Systematic structural and functional analysis identified a discontinuous functional epitope for receptor binding and activation, most of which was placed onto a smaller ring (Cys(6) to Cys(17)) that was created by repositioning the ANP native disulfide bond (Cys(7) to Cys(23)). High affinity was subsequently restored by optimizing the remaining noncritical residues by means of phage display. Residues that flanked the mini-ring structure were then deleted in stages, and affinity losses were rectified by additional phage-sorting experiments. Thus, structural and functional data on hormones, coupled with phage display methods, can be used to shrink the hormones to moieties more amenable to small-molecule design.