Antimicrobial peptides (AMPs), also known as host defense peptides, are short and generally positively charged peptides found in a wide variety of life forms from microorganisms to humans. Most AMPs have the ability to kill microbial pathogens directly, whereas others act indirectly by modulating the host defense systems. Against a background of rapidly increasing resistance development to conventional antibiotics all over the world, efforts to bring AMPs into clinical use are accelerating. Several AMPs are currently being evaluated in clinical trials as novel anti-infectives, but also as new pharmacological agents to modulate the immune response, promote wound healing, and prevent post-surgical adhesions. In this review, we provide an overview of the biological role, classification, and mode of action of AMPs, discuss the opportunities and challenges to develop these peptides for clinical applications, and review the innovative formulation strategies for application of AMPs.