A series of cyclic lactam analogues of gamma-MSH (H-Tyr1-Val2-Met3-Gly4-His5-Phe6-Arg7-Trp8-Asp9-Arg10-Phe11-Gly12-OH) with a bulky hydrophobic residue in the direct proximity to the pharmacophore (Xaa-D-Phe/D-Nal(2')-Arg-Trp) were designed and synthesized by solid-phase methods. A variety of amino acids with a broad range of hydrophobic/hydrophilic properties was introduced in position 5 to further explore their complementary role in receptor selectivity. Biological evaluation of these peptides revealed several analogues with potent hMC3R agonist and hMC3R/hMC5R antagonist activities, and good receptor selectivity. Analogue 4, c[Nle-Arg-D-Phe-Arg-Trp-Glu]-NH2, was found to be a very potent and selective hMC3R agonist (EC50=1.2 nM, 112% act). In addition, analogue 13, c[Nle-Val-D-Nal(2')-Arg-Trp-Glu]-NH2, was identified as an hMC3R/hMC5R antagonist with the best selectivity against the hMC4R in this series (pA2(hMC3R)=8.4; pA2(hMC5R)=8.7). These results indicate the significance of steric factors in melanocortin receptor selectivity and suggest that introduction of bulky residues in the direct proximity to the melanocortin pharmacophore is an effective approach to design of novel hMC3R and hMC5R selective ligands.