Brain injury can lead to the loss of neuronal functions and connections, along with the damage of the extracellular matrix (ECM). Thus, it ultimately results in devastating long-term damage, and recovery from this damage is a challenging task. To address this issue, we have designed a sulfo-group-functionalized injectable biocompatible peptide hydrogel, which not only mimics the ECM and supports the damaged neurons but also releases a neurotrophic factor around the injured sites of the brain in the presence of the matrix metalloproteinase 9 (MMP9) enzyme. It has also been observed that the driving force of hydrogel formation is a β-sheet secondary structure and π-πstacking interactions between Phe-Phe moieties. The hydrogel is able not only to promote neurite outgrowth of PC12-derived neurons and primary neurons cultured in its presence but also to nullify the toxic effects of anti-nerve growth factor (Anti-NGF)-induced neurons. It also promotes the expression of vital neuronal markers in rat cortical primary neurons, displays substantial potential in neuroregeneration, and also promotes fast recovery of the sham injured mice brain. Increased expression of reactive astrocytes in the hippocampal dentate gyrus region of the sham injured brain clearly suggests its tremendous ability in the neural repair of the damaged brain. Thus, we can convincingly state that our hydrogel is capable of repairing brain injury by mimicking an ECM-like environment and providing neuroprotection to the damaged neurons. © 2020 American Chemical Society.