Macrocyclization of peptides reduces conformational flexibilities, potentially leading to improved drug-like properties, such as target specificities and metabolic stabilities. As chemical methodologies often allow side reactions like epimerization and oligomerization, keen attention has been directed toward enzymatic peptide cyclization using peptide cyclases from specialized metabolic pathways. Penicillin-binding protein-type thioesterases (PBP-type TEs) are a recently identified family of peptide cyclases involved in the biosynthesis of non-ribosomal peptides in actinobacteria. PBP-type TEs have undergone intensive investigation due to their outstanding potential as biocatalysts. This review summarizes the rapidly growing knowledge on PBP-type TEs, with special emphasis on their functions, scopes, and structures, and efforts towards their biocatalytic applications.