Transpeptidation reactions result in the formation of new peptide bonds and this can occur between two separate peptides or within the one peptide. These reactions are catalyzed by enzymes and when the N- and C-terminus of the one peptide are joined it results in the formation of cyclic proteins. Cyclization via head-to-tail linkage of the termini of a peptide chain occurs in only a small percentage of proteins but gives the resultant cyclic proteins exceptional stability. The mechanisms are not well understood and this review documents what is known of the events that lead to cyclization. Gene encoded cyclic proteins are found in both prokaryotic and eukaryotic species. The prokaryotic circular proteins include the bacteriocins and pilins. The eukaryotic circular proteins in mammals include the θ-defensins and retrocyclins. Small cyclic proteins are also found in fungi and a large range of cyclic proteins are expressed in cyanobacteria. Three types of cyclic proteins have been found in plants, the small cyclic proteins of 5-12 amino acids, the cyclic proteins from sunflower which are made up of 12-14 amino acids, and the larger group known as cyclotides which contain 28-37 amino acids. Three classes of enzymes are able to catalyse transpeptidation reactions, these include the cysteine, serine and threonine proteases. However only cysteine and serine proteases have been documented to cyclize proteins. The cyclotides from Oldenlandia affinis, the plant in which cyclotides were first discovered, are processed by an asparaginyl endopeptidase which is a cysteine protease. These proteases cleave an amide bond and form an acyl enzyme intermediate before nucleophilic attack of the amine group of the N-terminal residue to form a peptide bond, resulting in a cyclic peptide.