PEPSI is the fiber-feed high-resolution optical echelle spectrograph for the Large Binocular Telescope (LBT) in Arizona. It is designed to utilize the two 8.4m apertures of the LBT in a seeing-limited mode so that light can be fed to the spectrograph via two permanently mounted focal stations (PFUs) and thereby providing a high resolution standby spectrograph for the LBT Observatory. The combination of advanced optical components and image slicing allows a spectral resolution of up to 250,000 while covering the entire optical wavelength range without gaps. Two identical but independent Stokes IQUV polarimeters, mounted in each of the direct F/15 Gregorian foci, allows the simultaneous observation of circularly and linearly polarized light with high spectral and temporal resolution. During the day, the spectrograph is fed with solar light from the robotic SDI telescope. Additional to the LBT, PEPSI can be used with the 1.8m Vatican Advanced Technology Telescope (VATT) through a 450m fiber link.