This paper reports a novel microfluidic platform introducing peptide hydrogel to make biocompatible microenvironment as well as realizing in situ cell-based assays. Collagen composite, OPLA and Puramatrix scaffolds are compared to select good environment for human hepatocellular carcinoma cells (HepG2) by albumin measurement. The selected biocompatible self-assembling peptide hydrogel, Puramatrix, is hydrodynamically focused in the middle of main channel of a microfluidic device, and at the same time the cells are 3-dimensionally immobilized and encapsulated without any additional surface treatment. HepG2 cells have been 3-dimensionally cultured in a poly(dimethylsiloxane) (PDMS) microfluidic device for 4 days. The cells cultured in micro peptide scaffold are compared with those cultured by conventional petri dish in morphology and the rate of albumin secretion. By injection of different reagents into either side of the peptide scaffold, the microfluidic device also forms a linear concentration gradient profile across the peptide scaffold due to molecular diffusion. Based on this characteristic, toxicity tests are performed by Triton X-100. As the higher toxicant concentration gradient forms, the wider dead zone of cells in the peptide scaffold represents. This microfluidic platform facilitates in vivo-like 3-dimensional microenvironment, and have a potential for the applications of reliable cell-based screening and assays including cytotoxicity test, real-time cell viability monitoring, and continuous dose-response assay.