Non-specific toxicity of chemotherapeutics and evolution of malignant tumors against them are major challenges for existing cancer chemotherapeutic regimens. Engineering of nanomaterials has attempted to minimize the toxicity of anticancer drugs, but systemic delivery of these nanomaterials still imposes many hurdles in their clinical use like burst release of chemotherapeutics and toxicity and immunogenicity associated with excipients of nanomaterials. However, there has been a surge in the development of natural and synthetic nanomaterials to deliver anticancer agents to the diseased (tumor) site as it can minimize the systemic circulation of anticancer drugs and reduce the toxicity-related challenges. Therefore, localized drug delivery is considered as the most effective way to deliver therapeutics but is further challenged by poor biodegradability, high immunogenicity, poor drug entrapment efficacy and inability to maintain sustained release of anticancer agents at the tumor site. This review maps out recent advancements in engineering of low molecular weight hydrogels derived from amino acid, fatty acyl, steroidal lipid and drug conjugated amphiphilic scaffolds. We have summarized the efforts for the development of molecular hydrogels in terms of biocompatibility, therapeutic potential and challenges associated with existing molecular hydrogels for cancer therapy.