Understanding peptide self-assembly mechanisms and stability of the formed assemblies is crucial for the development of functional nanomaterials. Herein, we have adopted a rational design approach to demonstrate how a minimal structural modification to a nonassembling ultrashort ionic self-complementary tetrapeptide FEFK (Phe4) remarkably enhanced the stability of self-assembly into β-sheet nanofibers and induced hydrogelation. This was achieved by replacing flexible phenylalanine residue (F) by the rigid phenylglycine (Phg), resulting in a constrained analogue PhgEPhgK (Phg4), which positioned aromatic rings in an orientation favorable for aromatic stacking. Phg4 self-assembly into stable β-sheet ladders was facilitated by π-staking of aromatic side chains alongside hydrogen bonding between backbone amides along the nanofiber axis. The contribution of these noncovalent interactions in stabilizing self-assembly was predicted by in silico modeling using molecular dynamics simulations and semiempirical quantum mechanics calculations. In aqueous medium, Phg4 β-sheet nanofibers entangled at a critical gelation concentration ≥20 mg/mL forming a network of nanofibrous hydrogels. Phg4 also demonstrated a unique surface activity in the presence of immiscible oils and was superior to commercial emulsifiers in stabilizing oil-in-water (O/W) emulsions. This was attributed to interfacial adsorption of amphiphilic nanofibrils forming nanofibrilized microspheres. To our knowledge, Phg4 is the shortest ionic self-complementary peptide rationally designed to self-assemble into stable β-sheet nanofibers capable of gelation and emulsification. Our results suggest that ultrashort ionic-complementary constrained peptides or UICPs have significant potential for the development of cost-effective, sustainable, and multifunctional soft bionanomaterials.