Cell penetrating peptides (CPP), also known as protein transduction domains (PTD), are small peptides able to carry peptides, proteins, nucleic acid, and nanoparticles, including viral particles, across the cellular membranes into cells, resulting in internalization of the intact cargo. In general, CPPs can be broadly classified into tissue-specific and non-tissue specific peptides, with the latter further sub-divided into three types: (1) cationic peptides of 6-12 amino acids in length comprised predominantly of arginine, lysine and/or ornithine residues; (2) hydrophobic peptides such as leader sequences of secreted growth factors or cytokines; and (3) amphipathic peptides obtained by linking hydrophobic peptides to nuclear localizing signals. Tissue-specific peptides are usually identified by screening of large peptide phage display libraries. These transduction peptides have the potential for a myriad of diagnostic as well as therapeutic applications, ranging from delivery of fluorescent or radioactive compounds for imaging, to delivery of peptides and proteins of therapeutic potential, and improving uptake of DNA, RNA, siRNA and even viral particles. Here we review the potential applications as well as hurdles to the tremendous potential of these CPPs, in particular the cell-type specific peptides.