Clinical success of bladder reconstructive procedures could be promoted by the availability of functional biomaterials. In this study, we have developed a multi-layered scaffold consisting of a bioactive fibrin layer laminated between two collagen sheets all having undergone plastic compression. With this construct we performed bladder augmentation in a nude rat model after partial bladder excision and evaluated the morphological and functional behavior of the implant. The fibrin was functionalized with a recombinant human insulin-like growth factor-1 (IGF-1) variant that covalently binds fibrin during polymerization and has a matrix metalloproteinase-cleavage insert to enable cell-mediated release. The purified IGF-1 variant showed similar bioactivity in vitro compared to commercially available wild type (wt) IGF-1, inducing receptor phosphorylation and induction of human smooth muscle cell proliferation. In vivo, the multi-layered bioactive collagen-fibrin scaffolds loaded with the IGF-1 variant triggered dose dependent functional host smooth muscle cell invasion and bundle formation with re-urothelialization 4 weeks after surgery in a rat model.