The tremendous diversity in the structure and function of proteins has stimulated intense interest in using them for nanotechnology applications. In this review, we discuss recent developments in the engineering of proteins and peptides for the design and construction of functional and structural elements of nanodevices. We begin with a short discussion highlighting the differences between chemical and biological synthesis of proteins and peptides. Subsequently, we review recent applications of proteins and peptides as molecular motors, transducers, biosensors, and structural elements of nanodevices. We supplement this review with highlights of our own work in the areas of peptide-based transducers for stand-alone and intra-molecular applications. This is followed by a short discussion of nanotechnology safety issues, and how proteins and peptides may enable the development of biocompatible nanomaterials. The future outlook for protein and peptide-based nanomaterials is then discussed, with an eye toward the significant impact of improved computational techniques on the field.