An efficient functionalization of tyrosine residues in phenolic regions is achieved under metal-free conditions. The strategy involves the conversion of a tyrosine residue to 4-amino phenylalanine or 4-amino-3-methoxy phenylalanine in short peptides through a controlled oxidative dearomatization. This transformation is achieved in one pot with good yields and excellent regioselectivity. Consequently, the self-assembly of the peptide compounds has been studied at the nanoscopic level before and after functionalization. The results suggest that the peptide derivatives comprising amide groups promote intermolecular H-bonding interactions and the difference in -OH and -NH2 functional groups is found to be responsible for the morphological changes. Morphological transitions from 1D nanowires to 2D nanosheets were observed during functional group modification.