Polyethylene glycol (PEG) is a water soluble, biocompatible, non-toxic polymer and PEGylation is a well established technique for the modification of therapeutic proteins and peptides. PEG-protein drugs have been extensively studies in relation to therapies for various diseases: cancer, inflammation and others. The covalent attachment of PEG to proteins and peptides prolonged plasma half-life, reduced antigenicity and immunogenicity, increased thermal and mechanical stability, and prevented degradation by enzymes. Several chemical groups for general and site specific conjugation have been exploited to activate PEG for amino group, carboxyl group, and cysteine groups. PEGylation of many proteins and peptides have been studied to enhance their properties for the potential uses. Also, the different positional isomers in several PEG-proteins have shown the difference in vivo stability and biological indicating that the site of PEG molecule attachment is one of the important factor to develop PEG-proteins as potential therapeutic agents.