Protein misfolding and subsequent generation of amyloid fibrils are associated with a wide range of diseases e. g. Alzheimer's, Huntington's, Parkinson's, type II diabetes, cystic fibrosis, and many others. Aromatic amino acid residues of polypeptide/protein are supposed to play a critical role in formation and stabilization of amyloid fibrils. Herein, we report a synthetic peptide, ALYLV (peptide 1), corresponding to B14‐18 of insulin, that forms nanofibrillar aggregates upon self‐association in aqueous medium. Staining with congo red (CR) and thioflavin t (ThT) establish that these organized nano‐assemblies are amyloidogenic in nature. Interestingly, the structural modification of peptide 1 replacing the centrally located tyrosine residue with valine, ALVLV (peptide 2), significantly reduces the assembly propensity as well as the amyloidogenicity of peptide 2 compared to peptide 1. MTT (3‐(4,5‐dimethylthiazol‐2‐yl)‐2,5‐diphenyltetrazolium bromide) cell survival assay reveals the cytotoxicity of the aggregated peptides on HeLa cells upon 48 h of exposure. Overall, the study explores the aggregation potential, amyloidogenicity, and cytotoxicity of a hotspot of insulin and pinpoints the role of aromatic amino acid residue in amyloidosis. This outcome also illuminates the peptide nano‐assemblies for various biotechnological applications. [ABSTRACT FROM AUTHOR]