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The abundance of molecules on early Earth likely enabled a wide range of prebiotic chemistry, with peptides playing a key role in the development of early life forms and the evolution of metabolic pathways. Among peptides, those with enzyme-like activities occupy a unique position between peptides and enzymes, combining both structural flexibility and catalytic functionality. However, their full potential remains largely untapped. Further exploration of these enzyme-like peptides at the nanoscale could provide valuable insights into modern nanotechnology, biomedicine, and even the origins of life. Hence, this review introduces the groundbreaking concept of “peptide nanozymes (PepNzymes)”, which includes single peptides exhibiting enzyme-like activities, peptide-based nanostructures with enzyme-like activities, and peptide-based nanozymes, thus enabling the investigation of biological phenomena at nanoscale dimensions. Through the rational design of enzyme-like peptides or their assembly with nanostructures and nanozymes, researchers have found or created PepNzymes capable of catalyzing a wide range of reactions. By scrutinizing the interactions between the structures and enzyme-like activities of PepNzymes, we have gained valuable insights into the underlying mechanisms governing enzyme-like activities. Generally, PepNzymes play a crucial role in biological processes by facilitating small-scale enzyme-like reactions, speeding up molecular oxidation-reduction, cleavage, and synthesis reactions, leveraging the functional properties of peptides, and creating a stable microenvironment, among other functions. These discoveries make PepNzymes useful for diagnostics, cellular imaging, antimicrobial therapy, tissue engineering, anti-tumor treatments, and more while pointing out opportunities. Overall, this research provides a significant journey of PepNzymes’ potential in various biomedical applications, pushing them towards new advancements.