An orthogonal cyclization strategy has been developed to prepare cyclic peptides individually or as a mixture in aqueous solutions. In this strategy, we propose a dual activation by entropy and enthalpy through Ag+ ion coordination of the reactive ends of an unprotected peptide thioester to permit long-range acyl migration. As a result, both lactamization and lactonization of linear peptides can be realized simultaneously or selectively by controlling the reaction conditions. At pH 4, lactonization is favored due to the strong protonation of the amino moieties. However, at pH 5-5.7 lactamization of alpha-amine of the N-terminal amino acid is favored, particularly with DMSO as a cosolvent. At pH > 6, lactamization of the epsilon-amine of lysine becomes significant. Furthermore, the Ag+ ion complexation with the peptide thioester precursor in aqueous buffered solutions may facilitate entropy-favored ring-chain tautomerization, which in turn promotes formation of monomeric cyclic products and thereby reduces unwanted oligomerization. Evidence supporting Ag+ ion-directed ring-chain tautomerization includes product distribution profiles, the concentration-independent nature of the cyclization, and lack of competition by intermolecular coupling with other unprotected peptide segments. The N-terninal amino acid has been found to exert a profound effect in conferring high specificity toward end-to-end cyclization. Examination of 23 linear peptide precursors containing different N-alpha-amino acids showed that the probability of lactamization is almost 20-fold greater in alpha-amines than epsilon-amines with N-terminal Gly, Asn, Asp, and Ser. Unprotected linear peptides ranging from 5 to 16 amino acid residues were cyclized individually or as a mixture with good to excellent yields. More importantly, this strategy paves the way for a new approach to synthesizing cyclic peptide libraries in which unprotected peptides are cyclized and released from the resin at the same time. The obtained libraries can, therefore, be used directly for bioassays without further chemical manipulations. This method is also useful for the synthesis of bicyclic peptides containing both sulfur-sulfur and lactam linkages.