This paper describes the discovery and characterization of a dipeptide sequence, Lys-Phe, that binds to the synthetic receptor cucurbit[8]uril (Q8) in neutral aqueous solution with subnanomolar affinity when located at the N-terminus. The thermodynamic and structural basis for the binding of Q8 to a series of four pentapeptides was characterized by isothermal titration calorimetry, NMR spectroscopy, and X-ray crystallography. Submicromolar binding affinity was observed for the peptides Phe-Lys-Gly-Gly-Tyr (FKGGY, 0.3 μM) and Tyr-Leu-Gly-Gly-Gly (YLGGG, 0.2 μM), whereas the corresponding sequence isomers Lys-Phe-Gly-Gly-Tyr (KFGGY, 0.3 nM) and Leu-Tyr-Gly-Gly-Gly (LYGGG, 1.2 nM) bound to Q8 with 1000-fold and 170-fold increases in affinity, respectively. To our knowledge, these are the highest affinities reported between a synthetic receptor and an unmodified peptide. The high-resolution crystal structures of the Q8·Tyr-Leu-Gly-Gly-Gly and Q8·Leu-Tyr-Gly-Gly-Gly complexes have enabled a detailed analysis of the structural determinants for molecular recognition. The high affinity, sequence-selectivity, minimal size of the target binding site, reversibility in the presence of a competitive guest, compatibility with aqueous media, and low toxicity of Q8 should aid in the development of applications involving low concentrations of target polypeptides.