Decellularized peripheral nerve matrix hydrogel (DNM-G) has drawn increasing attention in the field of neural tissue engineering, owing to its high tissue-specific bioactivity, drug/cell delivery capability, and multifunctional processability. However, the mechanisms and influencing factors of DNM-G formation have been rarely reported. To enable potential biological applications, the relationship between gelation conditions (including digestion time and gel concentration) and mechanical properties/stability (sol-gel transition temperature, gelation time, nanotopology, and storage modulus) of the DNM-G were systematically investigated in this study. The adequate-digested decellularized nerve matrix solution exhibited higher mechanical property, shorter gelation time, and a lower gelation temperature. A noteworthy increase of β-sheet proportion was identified through Fourier-transform infrared spectroscopy (FTIR) and circular dichroism (CD) characterizations, which suggested the possible major secondary structure formation during the phase transition. Besides, the DNM-G degraded fast that over 70% mass loss was noted after 4 weeks when immersing in PBS. A natural cross-linking agent, genipin, was gently introduced into DNM-G to enhance its mechanical properties and stability without changing its microstructure and biological performance. As a prefabricated scaffold, DNM-G remarkably increased the length and penetration depth of dorsal root ganglion (DRG) neurites compared to collagen gel. Furthermore, the DNM-G promoted the myelination and facilitated the formation of the morphological neural network. Finally, we demonstrated the feasibility of applying DNM-G in support-free extrusion-based 3D printing. Overall, the mechanical and biological performance of DNM-G can be manipulated by tuning the processing parameters, which is key to the versatile applications of DNM-G in regenerative medicine.