An Australian estuarine isolate of Penicillium sp. MST-MF667 yielded 3 tetrapeptides named the bilaids with an unusual alternating LDLD chirality. Given their resemblance to known short peptide opioid agonists, we elucidated that they were weak (Ki low micromolar) μ-opioid agonists, which led to the design of bilorphin, a potent and selective μ-opioid receptor (MOPr) agonist (Ki 1.1 nM). In sharp contrast to all-natural product opioid peptides that efficaciously recruit β-arrestin, bilorphin is G protein biased, weakly phosphorylating the MOPr and marginally recruiting β-arrestin, with no receptor internalization. Importantly, bilorphin exhibits a similar G protein bias to oliceridine, a small nonpeptide with improved overdose safety. Molecular dynamics simulations of bilorphin and the strongly arrestin-biased endomorphin-2 with the MOPr indicate distinct receptor interactions and receptor conformations that could underlie their large differences in bias. Whereas bilorphin is systemically inactive, a glycosylated analog, bilactorphin, is orally active with similar in vivo potency to morphine. Bilorphin is both a unique molecular tool that enhances understanding of MOPr biased signaling and a promising lead in the development of next generation analgesics.