Biological hydrogels are fundamentally biocompatible and have intrinsic similarities to extracellular matrices in medical applications and drug delivery systems. Herein we demonstrate the ability to form drug-eluting protein hydrogels using a novel mechanism that involves the electrostatically triggered partial denaturation and self-assembly of the protein via changes in pH. Partial denaturation increases the protein's solvent exposed hydrophobic surface area, which then drives self-assembly of the protein into a hydrogel within 10 min at 37 degrees C. We describe the properties of an albumin hydrogel formed by this mechanism. Intrinsic drug binding properties of albumin to all-trans retinoic acid (atRA) are conserved through the partial denaturation process, as confirmed by fluorescence quenching. atRA released from the hydrogel inhibited smooth muscle cell migration as per an in vitro scratch wound assay. Atomistic molecular dynamics and potential of mean force calculations show the preservation and potential creation of new atRA binding sites with a binding energy of -41 kJ/mol. The resulting hydrogel is also biocompatible and exhibits rapid postgelation degradation after its implantation in vivo. This interdisciplinary work provides a new tool for the development of biocompatible protein hydrogel drug delivery systems.