Objective: Islet transplantation provides an alternative to pancreatic transplantation for amelioration of the diabetic state. Extracellular matrix (ECM) components play important roles in controlling the survival and functions of beta cells and islets. In this study, we investigated whether RGD-modified elastin-like polypeptide (REP) could create ECM-mimicking environments to better support islet survival and insulin secretion following isolation until fully restored host integration. Methods: Islets were isolated from the pancreas of SD-rat by collagenase digestion technique. Rat islets treated with PBS or REP were transplanted under the kidney capsule of STZ-induced diabetic mice. Islets were cultured on the surfaces coated with REP. Cell viability, survival, and insulin secretion were measured. Quantitative real time PCR was exploited to determine the mRNA levels of insulin, PDX-1, BETA2, Ki67 and PCNA. Phosphorylation of Akt, ERK and FOXO1, and protein levels of PDX-1 and BETA2 were measured by Western blot analysis. Results: In the mice that transplanted with REP-treated islets, blood glucose level decreased immediately after transplantation, and normal blood glucose level sustained longer than their PBS treated counterparts. Histopathological examination of the grafts from mice transplanted with REP treated islets showed prominent, viable, insulin-stained cells under the kidney capsule. When islet cells were cultured on REP, dead cells were significantly decreased. Moreover, the mRNA and protein levels of insulin, PDX-1, Glut2, Ki67 and PCNA were increased in islets cultured on REP. The intensity of both Akt and ERK phosphorylation was significantly up-regulated by the presence of REP. REP induced the activation of Akt accompanied by FOXO1 phosphorylation, resulting in inactivation of transcriptional repression of PDX-1 expression. Conclusion: The results current study demonstrate that the up-regulation of PI3-kinase and ERK signaling pathway by REP would be an effective strategy for improving the cell survival and function of pancreatic islet cells, and hyperglycemia in diabetic animals. DGIST&NRF Grant:15-NB-01 and 2014R1A2A2A01005619.