Designed peptides derived from the islet amyloid polypeptide (IAPP) cross-amyloid interaction surface with A beta (termed interaction surface mimics or ISMs) have been shown to be highly potent inhibitors of A beta amyloid self-assembly. However, the molecular mechanism of their function is not well understood. Using solution-state and solid-state NMR spectroscopy in combination with ensemble-averaged dynamics simulations and other biophysical methods including TEM, fluorescence spectroscopy and microscopy, and DLS, we characterize ISM structural preferences and interactions. We find that the ISM peptide R3-GI is highly dynamic, can adopt a beta-like structure, and oligomerizes into colloid-like assemblies in a process that is reminiscent of liquid-liquid phase separation (LLPS). Our results suggest that such assemblies yield multivalent surfaces for interactions with A beta 40. Sequestration of substrates into these colloid-like structures provides a mechanistic basis for ISM function and the design of novel potent anti-amyloid molecules.