Oxygen is a vital molecule involved in regulating development, homeostasis, and disease. The oxygen levels in tissue vary from 1 to 14% with deviations from homeostasis impacting regulation of various physiological processes. In this work, we developed an approach to encapsulate enzymes at high loading capacity, which precisely controls the oxygen content in cell culture. Here, a single microcapsule is able to locally perturb the oxygen balance, and varying the concentration and distribution of matrix-embedded microcapsules provides spatiotemporal control. We demonstrate attenuation of hypoxia signaling in populations of stem cells, cancer cells, endothelial cells, cancer spheroids, and intestinal organoids. Varying capsule placement, media formulation, and timing of replenishment yields tunable oxygen gradients, with concurrent spatial growth and morphogenesis in a single well. Capsule containing hydrogel films applied to chick chorioallantoic membranes encourages neovascularization, providing scope for topical treatments or hydrogel wound dressings. This platform can be used in a variety of formats, including deposition in hydrogels, as granular solids for 3D bioprinting, and as injectable biomaterials. Overall, this platform's simplicity and flexibility will prove useful for fundamental studies of oxygen-mediated processes in virtually any in vitro or in vivo format, with scope for inclusion in biomedical materials for treating injury or disease.