Thixotropy is a fascinating feature present in many gel systems that has garnered a lot of attention in the medical field in recent decades. When shear stress is applied, the gel transforms into sol and immediately returns to its original state when resting. The thixotropic nature of the hydrogel has inspired scientists to entrap and release enzymes, therapeutics, and other substances inside the human body, where the gel acts as a drug reservoir and can sustainably release therapeutics. Furthermore, thixotropic hydrogels have been widely used in various therapeutic applications, including drug delivery, cornea regeneration and osteogenesis, to name a few. Because of their inherent biocompatibility and structural diversity, peptides are at the forefront of cutting-edge research in this context. This review will discuss the rational design and self-assembly of peptide-based thixotropic hydrogels with some representative examples, followed by their biomedical applications.