As many proteases such as urokinase plasminogen activator (uPA) are overexpressed in various tumors, a new type of peptide-based smart delivery system (hydrogel matrix) that could be degraded by uPA was previously described (Law, B.; Weissleder, R.; Tung, C. H. Peptide-based biornaterials for protease-enhanced drug delivery. Biomacromolecules 2006, 7 (4), 1261-1265). Subsequently, we designed nanometer-sized fluorescent nanofibers by introducing a hydrophilic component (methoxyl polyethylene glycol) to the core peptide [MPEG(2000)-BK(FITC)SGRSANA-kldlkldlkldl-NH2]. Preliminary studies showed that these nanofibers could detect uPA activity by optical imaging in vitro (Law, B.; Weissleder, R.; Tung, C. H. Protease-sensitive fluorescent nanofibers. Bioconjugate Chem. 2007, 18 (6), 1701-1704). Here, we further extend our studies to the structural responses of these nanofiber precursors (NFP). In the presence of a model protease, the FITC-containing hydrophilic fragments were released from the NFPs that contributed to fluorescence amplification. Simultaneously, the remaining self-assembling residues were mechanically driven to transform into interfibril networking of micrometer size hydrogel. These unique morphological changes, together with the optical property, may have considerable biomedical applications as diagnostic sensors for specific protease or dual systemic and functional delivery nanoplatforms to target protease-associated diseases.