The convergence of our understanding of structure–property relationships for selected biological macromolecules and our increased ability to prepare large synthetic macromolecules with a structural precision that approaches that of proteins have spawned a new area of research where chemistry and materials science join with biology. While evolution has enabled nature to perfect processes involving energy transfer or catalysis by incorporating functions such as self-replication and repair, synthetic macromolecules still depend on our synthetic skills and abilities to mesh structure and function in our designs. Clearly, we can take advantage of our understanding of natural systems to mimic the structural features that lead to optimized function. For example, numerous biological systems make use of the concept of site isolation whereby an active center or catalytic site is encapsulated, frequently within a protein, to afford properties that would not be encountered in the bulk state. The ability of the dendritic shell to encapsulate functional core moieties and to create specific site-isolated nanoenvironments, and thereby affect molecular properties, has been explored. By utilizing the distinct properties of the dendrimer architecture active sites that have either photophysical, photochemical, electrochemical, or catalytic functions have been placed at the core. Applying the general concept of site isolation to problems in materials research is likely to prove extremely fruitful in the long term, with short-term applications in areas such as the construction of improved optoelectronic devices. This review focuses on the evolution of a natural design principle that contributes to bridging the gap between biology and materials science. The recent progress in the synthesis of dendrimer-encapsulated molecules and their study by a variety of techniques is discussed. These investigations have implications that range from the preliminary design of artificial enzymes, catalysts, or light-harvesting systems to the construction of insulated molecular wires, light-emitting diodes, and fiber optics.