Antimicrobial peptides (AMPs) are effector molecules of the innate immune system. AMPs have a broad antimicrobial spectrum and lyse microbial cells by interaction with biomembranes. Besides their direct antimicrobial function, they have multiple roles as mediators of inflammation with impact on epithelial and inflammatory cells influencing diverse processes such as cytokine release, cell proliferation, angiogenesis, wound healing, chemotaxis, immune induction, and protease-antiprotease balance. Furthermore, AMPs qualify as prototypes of innovative drugs that may be used as antibiotics, anti-lipopolysaccharide drugs, or modifiers of inflammation. This review summarizes the current knowledge about the basic and applied biology of antimicrobial peptides and discusses features of AMPs in host defense and inflammation.