The communication of cells with their surroundings is mostly encoded in the epitopes of structural and signalling proteins present in the extracellular matrix (ECM). These peptide epitopes can be incorporated in biomaterials to serve as function-encoding molecules to modulate cell–cell and cell–ECM interactions. In this Review, we discuss natural and synthetic peptide epitopes as molecular tools to bioengineer bioactive hydrogel materials. We present a library of functional peptide sequences that selectively communicate with cells and the ECM to coordinate biological processes, including epitopes that directly signal to cells, that bind ECM components that subsequently signal to cells, and that regulate ECM turnover. We highlight how these epitopes can be incorporated in different biomaterials as individual or multiple signals, working synergistically or additively. This molecular toolbox can be applied in the design of biomaterials aimed at regulating or controlling cellular and tissue function, repair and regeneration.