The fundamental life-defining processes in living cells, such as replication, division, adaptation, and tissue formation, take place via intertwined metabolic reaction networks orchestrating downstream signal processing in a confined, crowded environment with high precision. Hence, it is crucial to understand and reenact some of these functions in wholly synthetic cell-like entities (protocells) to envision designing soft-materials with life-like traits. Herein, we report on a programmable all-DNA protocell (PC) composed of a liquid DNA interior and a hydrogel-like shell, harboring DNAzyme active sites in the interior whose catalytic bond-cleaving activity leads to a downstream phenotype change in the protocells, as well as triggers prototissue formation. In this regard, we coupled several tools of DNA nanoscience, such as RNA cleavage, dynamic strand displacement reactions, and multivalent palindromic interactions, in a synchronize pathway so that the input signal can be processed inside the protocells and generate downstream cues giving rise to metabolic adaptive behavior. For example, the compartmentalized DNAzyme catalyzes the bond-cleavage of a substrate that releases a DNA strand in situ to trigger a strand displacement reaction at the shell of the protocells leading to a change in color resembling a “phenotype-like” change in cells, and finally to establish communication with other protocells via multivalent interactions.