Bioinspired nanostructures can be the ideal functional smart materials to bridge the fundamental biology, biomedicine and nanobiotechnology fields. Among them, short peptides are among the most preferred building blocks as they can self-assemble to form versatile supramolecular architectures displaying unique physical and chemical properties, including intriguing optical features. Herein, we discuss the progress made over the past few decades in the design and characterization of optical short peptide nanomaterials, focusing on their intrinsic photoluminescent and waveguiding performances, along with the diverse modulation strategies. We review the complicated optical properties and the advanced applications of photoactive short peptide self-assemblies, including photocatalysis, as well as photothermal and photodynamic therapy. The diverse advantages of photoactive short peptide self-assemblies, such as eco-friendliness, morphological and functional flexibility, and ease of preparation and modification, endow them with the capability to potentially serve as next-generation, bio-organic optical materials, allowing the bridging of the optics world and the nanobiotechnology field.