Portions of proteins that are long (or sometimes short) chains of amino acids. In the body, peptides regulate the activity of many systems by interacting with target cells. Some peptides have hormonal activity, some have immune activity, some are cell-communicating ingredients that tell cells how to react and what to do, some are believed to play a role in wound healing, and still others are believed to affect the pathology of skin conditions such as atopic dermatitis. 
In theory, all peptides have cell-communicating ability, assuming the formulation supports the type of peptide used and is packaged to protect it from degrading during use (no jars!).
Whether peptides have benefit when applied topically to skin for wound healing, skin-barrier repair, or as disinfectants is difficult to ascertain because they generally cannot penetrate skin and at the same time remain stable because they are too hydrophilic, or water-loving. Ironically, peptides can become unstable in water-based formulas.  Further, because peptides are vulnerable to enzymes, the abundant enzymes present in skin can break the peptides down to the point where they have no effect at all.
The latest research is examining how different types of synthesized peptides can enter the living membrane of cells and, more interestingly, transport biologically active ingredients to these cells without them breaking down en route. Some peptides have demonstrated a remarkable anti-inflammatory effect. Creating specific peptide chains in the lab and then attaching a fatty acid component to them allows peptides to overcome their inherent limitations when it comes to being absorbed and remaining stable. Lab-engineered peptides appear to have the kind of efficacy and benefit that go beyond skin’s surface, which is exciting, but there’s still more to learn. [2,1]
For specialized peptides to exert a benefit beyond that of a water-binding agent, three criteria must be met: the peptides must be stable in their base formula, they must be paired with a carrier that enhances their absorption into skin, and they must be able to reach their target cell groups without breaking down.
Final note: Despite claims to the contrary, there are no peptides being used in skincare products that work like Botox, lasers, or dermal fillers. Peptides also cannot plump lips (at least not to a noticeable extent), lift sagging skin, lighten dark circles, or eliminate puffy eyes. You’ll see all of these claims and more on products with peptides, but such claims are not supported by published, peer-reviewed research.
- Robbins P, Oliver S, Sheu S, Goodnough J, Wender P, Khavari P. Peptide delivery to tissues via reversibly linked protein transduction sequences. Biotechniques. 2002;33(1):190-2; 194.
- Lupo M, Cole A. Cosmeceutical peptides. Dermatol Ther. 2007;20(5):343-9.