Antimicrobial peptides (AMPs) are a diverse group of naturally occurring molecules produced by eukaryotes and prokaryotes. They have an important role in innate immunity via their direct microbicidal properties or immunomodulatory activities against pathogens. With the widespread occurrence of antimicrobial resistance (AMR), AMPs are considered as viable alternatives for the treatment of multidrug-resistant microbes, inflammation, and, wound healing. The broad-spectrum antibacterial activity of AMPs is predominantly attributed to membrane disruption, leading to the formation of transmembrane pores and, eventually, cell lysis. However, mechanisms related to inhibition of cell wall synthesis, nucleic acid synthesis, protein synthesis, or enzymatic activity are also associated with these peptides. In this review, we discuss our current understanding, therapeutic uses and challenges associated with the clinical applications of AMPs.