This invention relates a process for preparing octreotide and derivatives thereof. The starting material, Cys(Trt)-2-Chlorotrityl resin is coupled with various amino acids to obtain a protected heptapeptide of formula (2): Boc-D-Phe-Cys(Trt)-Phe-D-Trp-Lys(Boc)-Thr(OBut)-Cys(Trt)-2-Chlorotrityl resin. The linear protected peptide of formula (2) is cleaved from the support using TFA5TIS and water to yield linear protected peptide of formula (3) Boc-D-Phe-Cys(Trt)-Phe-D-Trp-Lys(Boc)-Thr(OBut)-Cys(Trt)-OH Linear protected heptapeptide of formula (3) is deprotected to yield heptapeptide of formula (6): D-Phe-Cys-Phe-D-Tip-Lys-Thr-Cys-OH which is cyclized using hydrogen peroxide and to the cyclic peptide of formula (7) D-Phe-Cys-Phe-D-Trp-Lys-Thr-Cys-OH threoninol is coupled at C terminal to yield octreotide. Alternatively threoninol is coupled to the heptapeptide of formula (3) to yield protected octapeptide of formula (4) Boc-D-Phe-Cys(Trt)-Phe-D-Trp-Lys(Boc)-Thr(OBut)-Cys(Trt)-Thr-OL which is subsequently deprotected to yield linear octapeptide of formula (5) D-Phe-Cys-Phe-D-Trp-Lys-Thr-Cys-Thr-OL and cyclized with hydrogen peroxide to yield cyclic octreotide with a yield of >95%.