Tumor-homing peptides are widely used for improving tumor selectivity of anticancer drugs and imaging agents. The goal is to increase tumor uptake and reduce accumulation at nontarget sites. Here, we describe current approaches for tumor-homing peptide identification and validation, and provide comprehensive overview of classes of tumor-homing peptides undergoing preclinical and clinical development. We focus on unique mechanistic features and applications of a recently discovered class of tumor-homing peptides, tumor-penetrating C-end Rule (CendR) peptides, that can be used for tissue penetrative targeting of extravascular tumor tissue. Finally, we discuss unanswered questions and future directions in the field of development of peptide-guided smart drugs and imaging agents.