A major hindrance in engineering tissues containing highly metabolically active cells is the insufficient oxygenation of these implants, which results in dying or dysfunctional cells in portions of the graft. The development of methods to increase oxygen availability within tissue-engineered implants, particularly during the early engraftment period, would serve to allay hypoxia-induced cell death. Herein, we designed and developed a hydrolytically activated oxygen-generating biomaterial in the form of polydimethylsiloxane (PDMS)-encapsulated solid calcium peroxide, PDMS-CaO2. Encapsulation of solid peroxide within hydrophobic PDMS resulted in sustained oxygen generation, whereby a single disk generated oxygen for more than 6 wk at an average rate of 0.026 mM per day. The ability of this oxygen-generating material to support cell survival was evaluated using a β cell line and pancreatic rat islets. The presence of a single PDMS-CaO2 disk eliminated hypoxia-induced cell dysfunction and death for both cell types, resulting in metabolic function and glucose-dependent insulin secretion comparable to that in normoxic controls. A single PDMS-CaO2 disk also sustained enhanced β cell proliferation for more than 3 wk under hypoxic culture conditions. Incorporation of these materials within 3D constructs illustrated the benefits of these materials to prevent the development of detrimental oxygen gradients within large implants. Mathematical simulations permitted accurate prediction of oxygen gradients within 3D constructs and highlighted conditions under which supplementation of oxygen tension would serve to benefit cellular viability. Given the generality of this platform, the translation of these materials to other cell-based implants, as well as ischemic tissues in general, is envisioned.