The use of biologics (peptide and protein based drugs) has increased significantly over the past few decades. However, their development has been limited by their short half-life, immunogenicity and low membrane permeability, restricting most therapies to extracellular targets and administration by injection. Lipidation is a clinically-proven post-translational modification that has shown great promise to address these issues: improving half-life, reducing immunogenicity and enabling intracellular uptake and delivery across epithelia. Despite its great potential, lipidation remains an underutilized strategy in the clinical translation of lead biologics. We review how lipidation can overcome common challenges in biologics development as well as highlight gaps in our understanding of the effect of lipidation on therapeutic efficacy, where increased research and development efforts may lead to next-generation drugs.