Inflammation plays a critical role in the development of hypoxia–ischemia (HI) induced newborn brain damage. A localized, sustained delivery of dexamethasone (Dex) through an intracerebral injection could reduce the inflammatory response in the injured perinatal brain while avoiding unnecessary side effects. Herein, investigated using anionic sulfobutyl ether β‐cyclodextrin (SBE‐β‐CD) to load Dex in the (RADA)4 nanofiber networks as a means of reducing the inflammatory response to HI injury is investigated. The ionic interaction between SBE‐β‐CD and (RADA)4 dramatically affects nanofiber formation and the stability of the nanoscaffold is highly dependent on the SBE‐β‐CD/(RADA)4 ratio. It is observed that the Dex release rate is affected by the concentration of SBE‐β‐CD and (RADA)4 peptide. A higher concentration of SBE‐β‐CD or (RADA)4 results in a higher drug encapsulation efficiency and slower release rate of Dex. This phenomenon may be related to the structure of fiber bundles. Animal studies show that nanoscaffold loaded with Dex inhibits both microglia activation and glial scar formation compared to controls (Dex alone or nanoscaffold alone) within 2 days of injury. It is thought that this is a step toward building a multifaceted nanoscaffold that can be used to treat HI events in perinates.