Bacteria and fungi use large multifunctional enzymes, the so-called nonribosomal peptide synthetases (NRPSs), to produce peptides of broad structural and biological activity. Biochemical studies have contributed substantially to the understanding of the key principles of these modular enzymes that can draw on a much larger number of catalytic tools for the incorporation of unusual features compared with the ribosomal system. Several crystal structures of NRPS-domains have yielded deep insight into the catalytic mechanisms involved and have led to a better prediction of the products assembled and to the construction of hybrid enzymes. In addition to the structure-function relationship of the core- and tailoring-domains of NRPSs, which is the main focus of this review, different biosynthetic strategies and essential enzymes for posttranslational modification and editing are discussed.