This research investigates the impact of the nature of Dark Energy (DE) on structure formation, focusing on the matter power spectrum and the Integrated Sachs–Wolfe effect (ISW). By analyzing the matter power spectrum at redshifts z=0 and z=5, as well as the ISW effect on the scale of ℓ=10−100, the study provides valuable insights into the influence of DE equations of state (EoS) on structure formation. The findings reveal that dynamical DE models exhibit a stronger matter power spectrum compared to constant DE models, with the JBP model demonstrating the highest amplitude and the CPL model the weakest. Additionally, the study delves into the ISW effect, highlighting the time evolution of the ISW source term F(a) and its derivative dF(a)/da, and demonstrating that models with constant DE EoS exhibit a stronger amplitude of F(a) overall, while dynamical models such as CPL exhibit the highest amplitude among the dynamical models, whereas JBP has the lowest. The study also explores the ISW auto-correlation power spectrum and the ISW cross-correlation power spectrum, revealing that dynamical DE models dominate over those with constant DE EoS across various surveys. Moreover, it emphasizes the potential of studying the non-linear matter power spectrum and incorporating datasets from the small scales to further elucidate the dynamical nature of dark energy. This comprehensive analysis underscores the significance of both the matter power spectrum and the ISW signal in discerning the nature of dark energy, paving the way for future research to explore the matter power spectrum at higher redshifts and in the non-linear regime, providing deeper insights into the dynamical nature of dark energy.