Bio-inspired approaches represent potentially transformational methods to fabricate and activate non-natural materials for applications ranging from biomedical diagnostics to energy harvesting platforms. Recently, bio-based methods for the exfoliation of graphene in water have been developed, resulting in peptide-capped nanosheets; however, a clear understanding of the reaction system and peptide ligand structure remains unclear, limiting the advance of such approaches. Here the effects of reaction solution conditions and peptide ligand structure were systematically examined for graphene exfoliation, identifying key parameters to optimize material production. For this, the P1 peptide, identified with affinity for graphene, was exploited to drive exfoliation of bulk graphite to generate the final materials. The peptide was modified at both the N- and C-terminus with a 10-carbon chain fatty acid to explore the effects of a hydrophobic domain on the exfoliation process. The system was examined as a function of sonication time, pH, reagent concentration, and graphite source, where the final materials were fully characterized using a suite of approaches. Collectively, these results demonstrated that maximum graphene production was achieved using the parent P1 peptide after 12 h of sonication under basic conditions. While the exfoliation efficiency was slightly lower for the fatty acid modified peptides, the graphene produced using these biomolecules had fewer defects incorporated, potentially from the wrapping of the nanosheet edge by the aliphatic domain. Such results are important to provide key reaction designs to optimize the reproducibility of graphene exfoliation using biomimetic approaches.