Demyelinating injuries and diseases, like multiple sclerosis, affect millions of people worldwide. Oligodendrocyte precursor cells (OPCs) have the potential to repair demyelinated tissues because they can both self-renew and differentiate into oligodendrocytes (OLs), the myelin producing cells of the central nervous system (CNS). Cell-matrix interactions impact OPC differentiation into OLs, but the process is not fully understood. Biomaterial hydrogel systems help to elucidate cell-matrix interactions because they can mimic specific properties of native CNS tissues in an in vitro setting. We investigated whether OPC maturation into OLs is influenced by interacting with a urokinase plasminogen activator (uPA) degradable extracellular matrix (ECM). uPA is a proteolytic enzyme that is transiently upregulated in the developing rat brain, with peak uPA expression correlating with an increase in myelin production in vivo. OPC-like cells isolated through the Mosaic Analysis with Double Marker technique (MADM OPCs) produced low-molecular-weight uPA in culture. MADM OPCs were encapsulated into two otherwise similar elastin-like protein (ELP) hydrogel systems: one that was uPA degradable and one that was nondegradable. Encapsulated MADM OPCs had similar viability, proliferation, and metabolic activity in uPA degradable and nondegradable ELP hydrogels. Expression of OPC maturation-associated genes, however, indicated that uPA degradable ELP hydrogels promoted MADM OPC maturation although not sufficiently for these cells to differentiate into OLs.