Despite the notoriously poor membrane permeability of peptides in general, many cyclic peptide natural products show high passive membrane permeability and potently inhibit a variety of “undruggable” intracellular targets. A major impediment to designing cyclic peptides with good permeability is the high desolvation energy associated with the peptide backbone amide NH groups. Strategies for mitigating the deleterious effect of the backbone NH group on permeability include N-methylation, steric occlusion, and the formation of intramolecular hydrogen bonds with backbone carbonyl oxygens, while there have been relatively few studies on the use of polar side chains to sequester backbone NH groups. We investigated the ability of N,N-pyrrolidinyl glutamine (Pye), whose side chain contains a powerful hydrogen bond accepting C=O amide group but no hydrogen bond donors, to sequester exposed backbone NH groups in a series of cyclic hexapeptide diastereomers. Analyses of partition coefficients, lipophilic permeability efficiencies (LPE), artificial and cell-based permeability assays revealed that specific Leu-to-Pye substitutions conferred dramatic improvements in aqueous solubility and permeability in a scaffold- and position-dependent manner. Introduction of the Pye residue thus offers a complementary tool, alongside traditional approaches, for improving membrane permeability and solubility in cyclic peptides.