We have discovered a template for inserting biofunctional epitopes into self-assembling peptides. Flanking the centrically positioned cue sequence by three repeats of RADA on each side retains the gelation properties of the self-assembling peptides. Using this bottom-up approach, new nanofibrous hydrogel scaffolds responsive and instructive to cell behavior can be readily prepared for 3-D cell culture and tissue engineering. To illustrate its application, we have synthesized building blocks containing short peptides to provide the following functions: 1) degradability sensitive to matrix metalloproteinases (MMPs), enzymes involved in extracellular matrix turnover during cell expansion; and 2) stimulation of neural differentiation. These examples demonstrate that two-way communication between cells and materials can be achieved with the designer peptide scaffolds.