The present invention provides a method for producing peptides by recombinant means. The peptides are expressed as part of a fusion protein comprising the target peptide and an engineered intein. The invention also provides the engineered inteins, fusion proteins comprising these, and DNA constructs coding for these fusion proteins. Upon thiol-induced cleavage of the fusion protein the carboxy-terminal a-thioester of the target peptide is obtained. The carboxy-terminal α-thioester can in principle react with any nucleophile and the strategy therefore allows a wider range of carboxy-terminal modifications such as chemical ligation, bioconjugation, or amidation. The engineered inteins of the present invention are minimized in size and has a cysteine mutation in the position corresponding by alignment to position 3 of Mxe GyrA intein (SEQ ID NO:1) leading to increased expression levels of the fusion protein and higher yields of the isolated target peptide, thus making the method of the invention suitable for production scale.