Proteins, which are natural heteropolymers, have evolved to exhibit a staggering array of functions and capabilities. As scientists and engineers strive to tackle important challenges in medicine, novel biomaterials continue to be devised, designed, and implemented to help to address critical needs. This review aims to cover the present advances in the use of protein engineering to create new protein and peptide domains that enable the formation of advanced functional hydrogels. Three types of domains are covered in this review: (a) the leucine zipper coiled-coil domains, (b) the EF-hand domains, and (c) the elastin-like polypeptides. In each case, the functionality of these domains is discussed as well as recent advancements in the use of these domains to create novel hydrogel-based biomaterials. As protein engineering is used to both create and improve protein domains, these advances will lead to exciting new biomaterials for use in a variety of applications.