A synthetic strategy for conjugating small molecules and peptide-based therapeutics, via a cleavable ester bond, to a lipidated β 3 -tripeptide is presented. The drug-loaded β 3 -peptide was successfully co-assembled with a functionally inert lipidated β 3tripeptide to form a hydrogel. Quantitative release of lactose from the hydrogel, by the action of serum esterases, is demonstrated over 28 days. The esterase-mediated sustained release of the bioactive brain-derived neurotrophic factor (BDNF) peptide mimics from the hydrogel resulted in increased neuronal survival and normal neuronal function of peripheral neurons. These studies define a versatile strategy for the facile synthesis and co-assembly of self-assembling β 3 -peptide-based hydrogels with the ability to control drug release using endogenous esterases with potential in vivo applications for sustained localized drug delivery.