Protein phase transitions play a vital role in both cellular functions and pathogenesis. Dispersed proteins can undergo liquid-liquid phase separation to form condensates, a process that is reversible and highly regulated within cells. The formation and physicochemical properties of these condensates, such as composition, viscosity, and multiphase miscibility, are precisely modulated to fulfill specific biological functions. However, protein condensates can undergo a further liquid-to-solid state, forming β-sheet-rich aggregates that may disrupt cellular function and lead to diseases. While this phenomenon is crucial for biological processes and has significant implications for neurodegenerative diseases, the phase behavior of naturally derived or engineered proteins and polypeptides also presents opportunities for developing high-performance, multifunctional materials at various scales. Additionally, the unique molecular recruitment capabilities of condensates inspire innovative advancements in biomaterial design for applications in drug discovery, delivery, and biosynthesis. This work highlights recent progress in understanding the mechanisms underlying protein phase behavior, particularly how it responds to internal molecular changes and external physical stimuli. Furthermore, the fabrication of multifunctional materials derived from diverse protein sources through controlled phase transitions is demonstrated.