Diphenylalanine dipeptide is a key recognition sequence of the β-amyloid protein that causes Alzheimer's disease. Due to its simple structure and excellent assembly performance, diphenylalanine dipeptide has been becoming a “star” building block in the field of molecular assembly to construct many functional materials. At present, a large number of researchers have been carried out on the controllable assembly of diphenylalanine dipeptide and its derivatives, including molecular design, structural regulation and functional applications. In recent years, through molecular assembly, our group has achieved the controlled preparation of diphenylalanine dipeptide-based assemblies by modulating various kinds of molecular interactions including Schiff-base covalent bonding, electrostatic attraction, hydrogen bonding and pi-pi stacking. In particular, we have explored optical properties and potential applications of such assembled diphenylalanine dipeptide-based materials. This review will mainly introduce the research progress mentioned above. Firstly, the preparation methods of diphenylalanine-based photofunctional materials through covalent, non-covalent or combined assembly are analyzed, compared and discussed. Then, the applications of these assembled materials in actively optical waveguiding, optical imaging for tracing drug delivery, photodynamic therapy for cancer treatment, patterned photofabrication and biomimetic photocatalysis are introduced in detail, respectively. Finally, we give a summary and propose the possible development trend of diphenylalanine dipeptide-based assemblies.