Three-dimensional cell culturing provides an appealing biomimetic platform to probe the biological effects of a designed extracellular matrix on the behavior of seeded neural stem or neural progenitor cells. This culturing model serves as an important tool to investigate functional regulators involved in proliferation and differentiation of neural progenitor cells. This study aims to reconstruct a polypeptide hydrogel matrix functionally integrated with cyclo-RGD motif [c(RGDfK)] for initial exploration of neural progenitor cell behavior in three-dimensional culture. Three types of hydrogel scaffolds including Type I collagen, RADA16 self-assembly peptide, and RADA16-c(RGDfK) self-assembly peptide hydrogel were employed to serve as the culturing extracellular matrix of neonatal rat spinal neural progenitor cells. The neural adhesion of functionalized self-assembly peptide hydrogel was acquired prior to its RADA16 counterpart with neural progenitor cell seeding tests. The biophysiological properties of self-assembly peptide hydrogel scaffolds were then detected by scanning electron microscopy and rheology measurements. The biological behavior of embedded neural progenitor cells including cell proliferation and differentiation in three-dimensional niche were analyzed by MTT [(3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide)] tests and immunocytochemistry fluorescence staining. The 1% (w/v) RADA16-c(RGDfK) hydrogel scaffold [R16-c(RGDfK)HS] demonstrated an elastic modulus(312 ± 5.7 Pa) compatible with central neural cells, which significantly facilitated the proliferation of embedded neural progenitor cells. Compared to collagen hydrogel, both RADA16 and RADA16-c(RGDfK) hydrogel scaffold improved the cellular proliferation and neuronal differentiation of neural progenitor cells in a three-dimensional culture model. In order to model neuronal regeneration, introduction of neurotrophin-3 in the differentiation environment significantly increased the neuronal differentiation in which the ratio of Tuj-1-positive cell number increased to 72.5% ± 4.7% in the c(RGDfK)-functionalized three-dimensional matrix environment at 7 days in culture. Collectively, the present R16-c(RGDfK)HS displays excellent central neural biocompatibility and emerges as a promising bioengineered extracellular matrix niche of neural stem or progenitor cells, building a solid foundation for the subsequent in vitro and in vivo studies including neural repair, regeneration, and development.