A core challenge in biomaterials, with both fundamental significance and technological relevance, concerns the rational design of bioactive microenvironments. Designer peptides can be engineered to undergo supramolecular assembly into hydrogels that mimic the mechanical, topological, and biochemical features of native tissue microenvironments. The relatively facile, inexpensive, and often automated preparation of peptides motivates the expanded use of assembling peptide hydrogels for biomedical applications. Integral to realizing functional biomaterials for tissue engineering from peptide assemblies is an understanding of the molecular and macroscopic features that govern assembly, morphology, and biological interactions. In this review, we discuss the design of assembling peptides, including primary structure (sequence), secondary structure (e.g., α-helix and β-sheets), and molecular interactions that facilitate assembly into multiscale materials with desired properties. We describe the characterization tools used to elucidate the molecular structure and interactions, morphology, bulk properties, and biological functionality. Understanding of these characterization methods enables aspiring researchers to access a variety of approaches in this ever-expanding field. Finally, we discuss the biological properties and applications of peptide-based biomaterials in the engineering of several important tissues. By connecting molecular features and mechanisms of assembling peptides to the materials and biological properties, we aim to guide the design and characterization of peptide-based biomaterials for tissue engineering and regenerative medicine.