A huge shortage of organ donors, particularly in the case of liver, has necessitated the development of alternative therapeutic strategies. Primary hepatocytes (pHCs) transplantation has made a considerable transition from bench to bedside, but the short-term viability and functionality of pHCs in in vitro limit their use for clinical applications. Different cell culture strategies are required to maintain the proliferation of pHCs for extended periods. Here, we described the formation of a hybrid scaffold based on a modified dipeptide for the culture of pHCs. First, the dipeptide (Dp), isoleucine-α,β-dehydrophenylalanine (IΔF) was synthesized, purified, and fully characterized. IΔF readily formed a highly stable hydrogel, which was also characterized by CD, TEM, and thioflavin T assay. The addition of soluble liver extracellular matrix (sLEM) to the dipeptide readily formed a hybrid scaffold that was characterized by TEM, and its mechanical strength was determined by rheology experiments. The hybrid scaffold was translucent, biocompatible, and proteolytically stable and, with its mechanical strength, closely mimicked that of the native liver. LEM1-Dp matrix exhibited high biocompatibility in the readily available adherent liver cell line Huh7 and primary rat hepatocyte cells (pHCs). pHCs cultured on LEM1-Dp matrix also maintained significantly higher cell viability and an escalated expression of markers related to the hepatocytes such as albumin as compared to that observed in cells cultured on collagen type I (Col I)-coated substrate plate (col-TCTP). Z-stacking of confocal laser microscopy's volume view clearly indicated pHCs seeded on top of the hydrogel matrix migrated toward the Z direction showing 3D growth. Our results indicated that low molecular weight dipeptide hydrogel along with sLEM can resemble biomimetic 3D-like microenvironments for improved pHCs proliferation, differentiation, and function. This hybrid scaffold is also easy to scale up, which makes it suitable for several downstream applications of hepatocytes, including drug development, pHCs transplantation, and liver regeneration.