Hypoxia and sepsis are key concerns towards modern regenerative medicine. Oxygen generating biomaterials having antibacterial property aims to answer these concerns. Hypoxia promotes reactive oxygen species at the implant site that delays wound healing. Sepsis in wound also contributes to delay in wound healing. Therefore, scaffold with antibacterial property and oxygen-producing capacities have shown ability to promote wound healing. In the present study oxygen releasing, ciprofloxacin loaded collagen chitosan scaffold was fabricated for sustained oxygen delivery. Calcium peroxide (CPO) acted as a chemical oxygen source. Oxygen release pattern exhibited a sustained release of oxygen with uniform deposition of CPO on the scaffold. The drug release study shows a prolonged, continuous, and sustained release of ciprofloxacin. Cell culture studies depict that scaffold has suitable cell attachment and migration properties for fibroblasts. In vivo studies performed in the skin flip model visually shows better wound healing and less necrosis. Histological studies show the maintenance of tissue architecture and the deposition of collagen. The results demonstrate that the proposed CPO coated ciprofloxacin loaded collagen-chitosan scaffold can be a promising candidate for skin tissue engineering.