The introduction of tissue engineering therapies for the repair of bone defects has been limited by poor survival of implanted cells. Because of the absence of a vascular network, the cells in a cell-scaffold construct are not adequately supplied with oxygen and nutrients. Thus far, all but one strategies to solve this problem have failed. Fortunately, oxygen-delivering biomaterials have shown promising results. In this study, composite microspheres comprising a poly(trimethylene carbonate) matrix and calcium peroxide particles (PTMC/CaO2) were prepared and assessed for their oxygen-delivering capacity and potential cytotoxicity. PTMC/CaO2 composite microspheres were shown to release oxygen for several weeks. Oxygen release appeared to be dependent on the presence of cholesterol esterase in the medium. The microspheres were not cytotoxic and promoted mesenchymal stromal cell proliferation under hypoxic conditions in vitro.