Morphogenic proteins due to their short half-life require high doses of growth factors in regeneration of load bearing tissues which leads to undesirable side effects. These side effects include bone overgrowth, tumor formation and immune reaction. An alternative approach to reduce undesirable side effects of proteins in regenerative medicine is to use morphogenic peptides derived from the active domains of morphogenic proteins or soluble and insoluble components of the extracellular matrix of mineralized load bearing tissues to induce differentiation of progenitor cells, mineralization, maturation and bone formation. In that regard, many peptides with osteogenic activity have been discovered. These include peptides derived from bone morphogenic proteins (BMPs), those based on interaction with integrin and heparin-binding receptors, collagen derived peptides, peptides derived from other soluble ECM proteins such as bone sialoprotein and enamel matrix proteins, and those peptides derived from vasculoinductive and neuro-inductive proteins. Although these peptides show significant osteogenic activity in vitro and increase mineralization and bone formation in animal models, they are not widely used in clinical orthopedic applications as an alternative to morphogenic proteins. This is partly due to the limited availability of data on structure and function of morphogenic peptides in physiological medium, particularly in tissue engineered scaffolds. Due to their amphiphilic nature, peptides spontaneously self-assemble and aggregate into micellar structures in physiological medium. Aggregation alters the sequence of amino acids in morphogenic peptides that interact with cell surface receptors thus affecting osteogenic activity of the peptide. Aggregation and micelle formation can dramatically reduce the active concentration of morphogenic peptides with many-fold increase in peptide concentration in physiological medium. Other factors that affect bioactivity are the non-specific interaction of morphogenic peptides with lipid bilayer of the cell membrane, interaction of the peptide with cell surface receptors that do not specifically induce osteogenesis leading to less-than-optimal osteogenic activity of the peptide, and less-than-optimal interaction of the peptide with osteogenic receptors on the cell surface. Covalent attachment or physical interaction with the tissue engineered matrix can also alter the bioactivity of morphogenic peptides and lead to a lower extent of osteogenesis and bone formation. This chapter reviews advances in discovery of morphogenic peptide, their structural characterization, and challenges in using morphogenic peptides in clinical applications as growth factors in tissue engineered devices for regeneration of load bearing tissues.