Till date, no bioartificial liver (BAL) procedure has obtained FDA approval or widespread clinical acceptance, mainly because of multifactorial limitations such as the use of microscale or undefined biomaterials, indirect and lower oxygenation levels in liver cells, short-term undesirable functions, and a lack of 3D interaction of growth factor/cytokine signaling in liver cells. To overcome preclinical limitations, primary rat liver cells were cultured on a naturally self-assembling peptide nanoscaffold (SAPN) in a clinically relevant bioreactor for up to 35 days, under 3D interaction with suitable growth factors and cytokine signaling agents, alone or combination (e.g., Group I: EPO, Group II: Activin A, Group III: IL-6, Group IV: BMP-4, Group V: BMP4 + EPO, Group VI: EPO + IL-6, Group VII: BMP4 + IL-6, Group VIII: Activin A + EPO, Group IX: IL-6 + Activin A, Group X: Activin A + BMP4, Group XI: EPO + Activin A + BMP-4 + IL-6 + HGF, and Group XII: Control). Major liver specific functions such as albumin secretion, urea metabolism, ammonia detoxification, phase contrast microscopy, immunofluorescence of liver specific markers (Albumin and CYP3A1), mitochondrial status, glutamic oxaloacetic transaminase (GOT) activity, glutamic pyruvic transaminase (GPT) activity, and cell membrane stability by the lactate dehydrogenase (LDH) test were also examined and compared with the control over time. In addition, we examined the drug biotransformation potential of a diazepam drug in a two-compartment model (cell matrix phase and supernatant), which is clinically important. This present study demonstrates an optimized 3D signaling/scaffolding in a preclinical BAL model, as well as preclinical drug screening for better drug development. J. Cell. Physiol. 227: 313–327, 2012. © 2011 Wiley Periodicals, Inc.