Peptide amphiphile (PA) is a peptide-based biomaterial that can self-assemble into a nanostructured gel-like scaffold, mimicking the chemical and biological complexity of natural extracellular matrix. To evaluate the capacity of the PA scaffold to improve islet function and survival in vitro, rat islets were cultured in three different groups-(1) bare group: isolated rat islets cultured in a 12-well nontissue culture-treated plate; (2) insert group: isolated rat islets cultured in modified insert chambers; (3) nanomatrix group: isolated rat islets encapsulated within the PA nanomatrix gel and cultured in modified insert chambers. Over 14 days, both the bare and insert groups showed a marked decrease in insulin secretion, whereas the nanomatrix group maintained glucose-stimulated insulin secretion. Moreover, entire islets in the nanomatrix gel stained positive for dithizone up to 14 days, indicating better maintained glucose-stimulated insulin production. Fluorescein diacetate/propidium iodide staining results also verified necrosis in the bare and insert groups after 7 days, whereas the PA nanomatrix gel maintained islet viability after 14 days. Thus, these results demonstrate the potential of PAs as an intermediary scaffold for increasing the efficacy of pancreatic islet transplantation. © 2011 Mary Ann Liebert, Inc.