Innovative biomaterial strategies are required to improve islet cell retention, viability, and functionality, and thereby obtain clinically successful outcomes from pancreatic islet cell transplantation. To address this need, we have developed a peptide amphiphile-based nanomatrix that incorporates multifunctional bioactive cues and sustained release of nitric oxide. The goal of this study was to evaluate the effect of this peptide amphiphile nanomatrix on the viability and functionality of MIN-6 islet cells. Additionally, this study provides insight into the role of nitric oxide in islet cell biology, given that conventional nitric oxide donors are unable to release nitric oxide in a controlled, sustained manner, leading to ambiguous results. It was hypothesized that controlled nitric oxide release in synergy with multifunctional bioactive cues would promote islet cell viability and functionality. Nitric oxide-releasing peptide amphiphile nanomatrices within the range of 16.25 μmol to 130 μmol were used to analyze MIN-6 cell behavior. Both 32.5 μmol and 65 μmol peptide amphiphiles showed improved MIN-6 functionality in response to glucose over a 7-day time period, and the elevated functionality was correlated with both PDX-1 and insulin gene expression. Our results demonstrate that nitric oxide has a beneficial effect on MIN-6 cells in a concentration-dependent manner. © 2014 Lim et al.