The burgeoning menace of antimicrobial resistance across the globe has necessitated investigations into other chemotherapeutic strategies to combat infections. Antimicrobial peptides, or host defense peptides, are a set of promising therapeutic candidates in this regard. Most of them cause membrane permeabilization and are a key component of the innate immune response to pathogenic invasion. It has also been reported that peptide self-assembly is a driving factor governing the microbicidal activity of these peptide candidates. While efforts have been made to develop novel synthetic peptides against various microbes, many clinical trials of such peptides have failed due to toxicity and hemolytic activity to the host. A function-guided rational peptide engineering, based on evolutionary principles, physicochemical properties and activity determinants of AMP activity, is expected to help in targeting specific microbes. Furthermore, it is important to develop a unified understanding of the evolution of AMPs in order to fully appreciate their importance in host defense. This review seeks to explore the evolution of AMPs and the physicochemical determinants of AMP activity. The specific interactions driving AMP self-assembly have also been reviewed, emphasizing implications of this self-assembly on microbicidal and immunomodulatory activity.