Self-assembling lipopeptide hydrogels have been widely developed for the delivery of therapeutics due to their rapid gelation, injectability, and highly controlled physicochemical properties. Lipopeptides are also known for their membrane-associating and cell penetrating properties, which may impact on their application in cell-encapsulation. Self-assembling lipidated-β3-peptide materials developed in our laboratory have previously been used in cell culture as 2D substrates, thus as a continuation of this work we aimed to encapsulate cells in 3D by forming a hydrogel. We therefore assessed the self-assembling lipidated-β3-peptides for cell-penetrating properties in mesenchymal stems cells (MSC) using fluorescence microscopy and membrane association with surface plasmon resonance spectroscopy (SPR). The results demonstrated that lipidated β3-peptides penetrate the MSC plasma membrane and localise to the mitochondrial network. While self-assembling lipopeptide hydrogels have shown tremendous potential for delivery of therapeutics, further optimisation may be required to minimise the membrane uptake of the lipidated-β3-peptides for cell encapsulation applications.