Owing to their structural simplicity and robust self-assembled nanostructures, short peptides prove to be an ideal system to explore the physical processes of self-assembly, hydrogels, semi-flexible polymers, quenched disorder, and reptation. Rational design in peptide sequences facilitates cost-effective manufacturing, but the huge number of possible peptides has imposed obstacles for their characterization to establish functional connections to the primary, secondary, and tertiary structures. This review aims to cover recent advances in the self-assembly of designed short peptides, with a focus on physical driving forces, design rules, characterization methods, and exemplar applications. Super-resolution microscopy in combination with modern image analysis have been applied to quantify the structure and dynamics of peptide hydrogels, while small-angle neutron scattering and solid-state nuclear magnetic resonance continue to provide valuable information on structures over complementary length scales. Short peptides are attractive in biomedicine and nanotechnology, e.g., as antimicrobials, anticancer agents, vehicles for controlled drug release, peptide bioelectronics, and responsive cell culture materials.