Fungal infections can lead to debilitating consequences if they are not treated effectively. Antifungal drugs used to treat these infections can be toxic and overuse contributes to growing antifungal resistance.Candidaspp., particularlyC. albicans, are implicated in a majority of these infections. VirulentC. albicansproduce secreted aspartic proteases (Saps) that aid in pathogen tissue invasion and proliferation at an infected site. Here, fungi‐responsive hydrogels are developed that degrade in the presence of Saps to provide a triggered release of encapsulated liposomal antifungals. The hydrogel backbone incorporates a Sap‐cleavable peptide sequence enabling Sap‐responsive degradation. Hydrogels are found to effectively degrade in the presence of Saps extracted fromC. albicans. Encapsulated liposomal antifungals show similar release kinetics as hydrogel degradation products in the presence of Saps, supporting a degradation‐dependent release mechanism. Antifungal liposome‐loaded responsive hydrogels exhibit successful eradication ofC. albicanscultures and remain stable in sterile murine wound fluid. Finally, no significant cytotoxicity is observed for murine fibroblast cells and red blood cells exposed to hydrogel degradation products. These fungi‐responsive hydrogels have the potential to be used for local, on‐demand delivery of antifungal drugs, for effective treatment of fungal infections while helping to limit unnecessary exposure to these therapeutics.