The clinical administration of many small niolecule, hydrophobic drugs is challenged by the insolubility of these drugs under physiological conditions. Because of this, the development of biocompatible scaffolds,capable of effectively delivering hydrophobic drug molecules is of patticular interest. Multidomain peptides (MDPs) provide biocompatible hydrogel scaffold's that are injectable and spaceconforniing, allowing fot in situ delivery.of a variety of drugs. Here we demonstrate that through manipulation of peptide primary- sequence a molecular cavity can be incorporated into the hydrophobic core of these peptide nanofibers allowing for encapsulation and delivery of small molecule drugs with poor water solubility. Using SN-38, daunorubicin, diflunisal, etodolae, levofloxacin, and norfloxacin, we demonstrate drug encapsulation and release from multidomain peptide fibers. Steady-state fluorescence and drug release studies show that hydrogels loaded with SN-38, diflunisal, and etodolac exhibit prolonged-drug release profiles due to intrafibrillat drug encapsulation. This study establishes multidomain peptides as promising carriers for localized in situ delivery of small molecule drugs with poor water solubility.