Triggered hydrogelation of MAX1 peptide (NH2-(VK)4-VDPPT-(KV)4-NH2) proceeds through peptide intramolecular folding into β-hairpins and immediate self-assembly into branched clusters of well defined (uniform, 3 nm cross section), semi-flexible, β-sheet-rich nanofibrils. Combined cryogenic transmission electron microscopy, dynamic light scattering and dynamic oscillatory rheology data indicate two distinct time scales for the formation of the hydrogel scaffold from branched nanofibril clusters: (1) onset of early-time intercluster interactions in solution through dangling fibrils and (2) an apparent percolation threshold when the dynamic shear modulus and the field-intensity autocorrelation function show power-law behavior with comparable critical dynamic exponents (n ≈ 0.47 and β′ ≈ 0.45). After percolation, finite interpenetration of percolating cluster with smaller clusters, along with permanent intercluster entanglements, increases the network rigidity. The knowledge of the two time scales that lead to MAX1 hydrogelation may provide a new strategy for the 3-d, homogeneous encapsulation of cells in the hydrogel scaffold for tissue regeneration applications.