We developed a simple strategy to diiodinated tyrosine (Tyr) amino acid at the 3‐ and 5‐ positions from the commercially available Fmoc/Boc‐L‐Tyrosine monomer. The iodinated tyrosine monomer have been further adopted to generate a variety of iodinated Fmoc tyrosine dimers. Upon Fmoc elimination, we obtained diketopiperazine (DKP) analogues of Cyclo(L‐Tyr‐L‐Tyr) with varied number of iodine atoms. We also report the biological studies of these iodinated DKP analogues in three different cancer cell lines. We demonstrate that the number of iodine atoms in the Cyclo(L‐Tyr‐L‐Tyr) DKP analogues, and the presence of electron‐rich phenolic group are essential structural parameters to have pronounced cytotoxic activity in three different cancer cell lines.