Microporous hydrogels have been widely used for delivering therapeutic cells. However, several critical issues, such as the lack of control over the harsh environment they are subjected to under pathological conditions and rapid egression of cells from the hydrogels, have produced limited therapeutic outcomes. To address these critical challenges, cell-tethering and hypoxic conditioning colloidal hydrogels containing mesenchymal stem cells (MSCs) are introduced to increase the productivity of paracrine factors locally and in a long-term manner. Cell-tethering colloidal hydrogels that are composed of tyramine-conjugated gelatin prevent cells from egressing through on-cell oxidative phenolic crosslinks while providing mechanical stimulation and interconnected microporous networks to allow for host-implant interactions. Oxygenating microparticlesencapsulated in tyramine-conjugated colloidal microgels continuously generated oxygen for 2 weeks with rapid diffusion, resulting in maintaining a mild hypoxic condition while MSCs consumed oxygen under severe hypoxia. Synergistically, local retention of MSCs within the mild hypoxic-conditioned and mechanically robust colloidal hydrogels significantly increased the secretion of various angiogenic cytokines and chemokines. The oxygenating colloidal hydrogels induced anti-inflammatory responses, reduced cellular apoptosis, and promoted numerous large blood vessels in vivo. Finally, mice injected with the MSC-tethered oxygenating colloidal hydrogels significantly improved blood flow restoration and muscle regeneration in a hindlimb ischemia (HLI) model.