Novel peptidyl derivatives of formula I are found to be potent inhibitors of interleukin-1.beta. converting enzyme (ICE). Compounds of formula I may be useful in the treatment of inflammatory or immune-based diseases of the lung and airways; central nervous system and surrounding membranes; the eyes and ears; joints, bones, and connective tissues; cardiovascular system including the pericardium; the gastrointestinal and urogenital systems; the skin and mucosal membranes. Compounds of formula I are also useful in treating the complications of infection (e.g., gram negative shock) and tumors in which IL 1 functions as an autocrine growth factor or as a mediator of cachexia. ##STR1##