Nitrifying biomass immobilized in a gel has been applied in wastewater treatment, as immobilization results in a high bacterial cell density in the reactor and facilitates easy solid–liquid separation in the settling tank. Herein, the diffusivity, reaction rate, and concentration profile of oxygen in a spherical gel entrapping ammonia-oxidizing bacteria (AOB) were investigated. Calcium alginate gel and 2,2-bis[4-(methacryloxy polyethoxy)phenyl] propane (BPE) gel were used as models to prepare millimeter-sized spherical gels. A novel method involving controlled oxygen transfer into/out of the spherical gel with alternative flow of air and N2 gas, measurement of oxygen concentration at the center of the spherical gel using an oxygen microsensor, and analysis using the Fickian diffusion equation was developed to determine oxygen diffusivity in the gel. Ammonia oxidation in the AOB-entrapping gel was also monitored by measuring the oxygen concentration at the center of the gel using an oxygen microsensor. The oxygen concentration profile in the gel was estimated based on the oxygen diffusivity and Michaelis–Menten model parameters determined for suspended AOB cells. The kinetic rate-determining step in the AOB-entrapping gel was identified using the effectiveness factor. The results would be useful for the development of aerobic bacteria-entrapping gels and the design of wastewater treatment processes using these gels.