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Abstract Inadequate oxygenation is a major challenge in cell encapsulation, a therapy which holds potential to treat many diseases including type I diabetes. In such systems, cellular oxygen (O 2 ) delivery is limited to slow passive diffusion from transplantation sites through the poorly O 2 -soluble encapsulating matrix, usually a hydrogel. This constrains the maximum permitted distance between the encapsulated cells and host site to within a few hundred micrometers to ensure cellular function. Inspired by the natural gas-phase tracheal O 2 delivery system of insects, we present herein the design of a biomimetic scaffold featuring internal continuous air channels endowed with 10,000-fold higher O 2 diffusivity than hydrogels. We incorporate the scaffold into a bulk hydrogel containing cells, which facilitates rapid O 2 transport through the whole system to cells several millimeters away from the device-host boundary. A computational model, validated by in vitro analysis, predicts that cells and islets maintain high viability even in a thick (6.6 mm) device. Finally, the therapeutic potential of the device is demonstrated through the correction of diabetes in immunocompetent mice using rat islets for over 6 months.