The blood-brain barrier (BBB) is the unique microvasculature of the brain that regulates the flow of molecules between the circulating blood and the brain by tightly controlled mechanisms. Disruption of the BBB has been associated with several neurological diseases which encouraged the development of biomimetic in vitro BBB models for basic and applied investigations. Current in vitro models fail to resemble the cellular, molecular, and dimensionality aspects of the in vivo BBB milieu and consequently cannot be faithfully used to understand its functions and activity. In the current thesis, we engineered a three-dimensional (3D) co-culture system utilizing polyethylene glycol (PEG) hydrogels functionalized with brain-mimetic laminin and fibronectin peptides. PEG hydrogels were modified with different concentrations of laminin-mimetic IKVAV, fibronectin-mimetic RGD peptides, and combinations thereof, and then chemically crosslinked with matrix metalloprotease sensitive peptides via a Michael type-addition. Astrocytes were encapsulated within the hydrogel, whereas endothelial cells (ECs) were seeded on the surface to resemble the in vivo endothelium. The viability of encapsulated astrocytes was assessed via a Live/Dead assay. Barrier integrity and tight junction formation were evaluated qualitatively by immunostaining for ZO-1 tight junction protein, and quantitatively by measuring TEER and permeability of sodium fluorescein and Evan’s blue bound to albumin tracers. The activity of astrocytes was assessed by GFAP immunohistochemistry. PEG hydrogels modified with 300 µM IKVAV promoted the highest viability of astrocytes but failed to enable EC adherence. However, PEG hydrogels functionalized with both RGD and IKVAV (300 µM:​300 µM), or 600 µM RGD solely induced cell attachment and monolayer formation. PEG hydrogels functionalized with RGD and IKVAV (300 µM:​300 µM) with encapsulated astrocytes and seeded ECs had a statistically higher TEER (55.33±1.47Ω.cm² at day 5), compared to other 3D and 2D controls (p-value≤0.001). Evan’s blue permeability at 120 mins (0.215±0.055 µg/mL) was lowest in this condition, while the permeability of sodium fluorescein did not change significantly (pvalue>0.05). ZO-1 expression showed a relatively more defined network in functionalized PEG hydrogels with encapsulated astrocytes compared to the 3D and 2D controls, while GFAP expression did not vary. PEG hydrogels functionalized with laminin and fibronectin mimetic peptides present a biomimetic tool to assess the efficiency of drug delivery for the treatment of neurological diseases and to understand the role of cell-cell and cell-matrix interactions on the BBB properties.