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Antimicrobial peptides (AMPs), long recognized for their broad-spectrum antimicrobial activity, have recently gained prominence as versatile anticancer agents. This review synthesizes recent advances positioning anticancer peptides (ACPs) at the forefront of novel oncological strategies, driven by their unique biophysical properties. Their cationic, amphipathic architecture enables selective electrostatic interactions with negatively charged malignant cell membranes, resulting in targeted, rapid membrane disruption and cell lysis. Beyond direct membrane effects, ACPs exert multifaceted intracellular actions including inhibition of DNA replication and protein synthesis, induction of mitochondrial dysfunction, and suppression of tumor angiogenesis. Increasingly, AMPs are recognized as potent immunomodulators capable of remodeling the tumor microenvironment. They induce immunogenic cell death, functioning as in situ vaccines that prime systemic antitumor immunity through intrinsic adjuvant effects that enhance antigen presentation. This review highlights clinically relevant AMPs categorized by Food and Drug Administration and European Medicines Agency approval status, illustrating the diversity of their therapeutic targets and mechanisms. We also critically examine key challenges hindering clinical translation, such as proteolytic instability, hemolytic toxicity, and suboptimal pharmacokinetics, and evaluate emerging solutions, including peptide engineering, nanoparticle-based delivery, and advanced conjugation strategies to improve stability, tumor specificity, and accumulation. Crucially, the integration of AMPs into combination regimens with conventional and immunotherapeutic agents presents a transformative strategy to overcome drug resistance and immune evasion. Nevertheless, clinical evidence remains limited, with most studies confined to early-phase trials. Ongoing efforts in optimizing peptide stability, developing targeted delivery systems, and identifying predictive biomarkers are essential to translate the promising preclinical profile of AMPs into clinically viable cancer therapeutics. With sustained interdisciplinary innovation and rigorous validation, AMPs are poised to become integral components of next-generation precision oncology.