Autologous adipose stem cells owing to its pluripotent nature offer a valuable source for pancreatic beta cell replacement in the treatment of diabetes mellitus. However, maintaining longevity and functionality of stem cell-derived islet-like cells for long-term in vitro culture is challenging. Signaling interaction between islets and surrounding extracellular matrix (ECM) is an important factor for islet survival and function. Tissue engineering strategy to use scaffolds as substitute for ECM is a key to the problem. In the present study, we fabricated a three-dimensional (3D) biodegradable scaffold comprised of natural polymers dextran and gelatin (DEXGEL) for differentiation of adipose stem cells to islet-like clusters (ILCs). Adipose stem cells derived from subcutaneous fat of New Zealand white rabbits were differentiated to ILCs on DEXGEL scaffold and two-dimensional (2D) culture plates via three stage protocol using cocktail of growth factors. The ILCs differentiated on DEXGEL scaffold exhibited characteristic islet morphology, and expressed islet-specific hormones (insulin, glucagon, and somatostatin). The insulin secretion in response to glucose challenge and viability of ILCs on DEXGEL scaffold were significantly higher in comparison to ILCs on 2D culture. Our results demonstrated for the first time that DEXGEL scaffold simulated an extracellular environment for effective differentiation of rabbit adipose stem cells to ILCs.