Cancer has become the biggest threat to human health in the world. Small-molecule chemotherapeutic drugs are widely used in clinical practice in cancer treatment, but systemic toxicity and drug resistance are common due to the lack of tumor targeting. One of the main challenges for the chemotherapeutic drug is how to directly transport sufficient drugs to tumor but not normal tissues. To solve this problem, antibody-drug conjugate (ADC) was proposed and has been the hot spot in tumor drug research for decades. Guided by the specific monoclonal antibodies, ADC can selectively deliver highly cytotoxic drugs to tumor sites therefore overcome the above shortcomings of small molecules. However, the molecule weight of antibodies is generally large that makes ADC low permeability in the tumor and seriously limits its therapeutic effect. In recent years, peptide-drug conjugate (PDC), using peptides with tumor targeting ability to replace antibodies, is emerging as another novel targeted delivery route of tumor drugs. A great number of tumor targeting penetration peptides have been investigated in PDC design and shown great potential in cancer treatment. Peptides could be easily prepared through chemical synthesis or expressed by prokaryotic systems. Therefore, compared with ADC, PDC has the advantages of higher drug loading, enhanced penetration capacity in solid tumors, easier multifunctional modification through chemical or genetic techniques, and lower production cost. With the deep study of intracellular transport pathway and drug release mechanism, PDC will be expected to be put into clinical application as soon as possible. In this review, the latest advances of PDC are summarized. Types and characteristics of different targeting peptides, cytotoxic molecules and linkers in PDC and their applications in cancer treatment are discussed. The advantages and disadvantages of current researches on PDC are reviewed, and future development prospected.