Regeneration of large bone defects is a significant clinical challenge with variable success, but tissue engineering strategies are promising for rapid and effective bone regeneration. Maintaining an adequate oxygen level within implanted scaffolds is a major obstacle in bone tissue engineering. We developed a new oxygen-generating scaffold by electrospinning polycaprolactone with calcium peroxide (CaO2) nanocuboids (CPNCs) and characterized the physical, chemical, and biological properties of the resulting composites. Our scaffolds are highly porous and composed of submicron fibers that include CPNC as confirmed with XRD and FTIR analyses. Scaffolds containing CPNC provided controlled oxygen release for 14-days and supported cell proliferation while protecting preosteoblasts from hypoxia-induced cell death. Oxygen-generating scaffolds also facilitated bone mimetic defect contraction in vitro. The results suggest that our approach can be used to develop tissue-engineered products which target bone defects.