Chronic wounds in diabetes undergo a lifetime risk of developing into diabetic foot ulcers. Oxygen is crucial to wound healing by regulating cell proliferation, migration, and neovascularization. However, current oxygen therapies, including hyperbaric oxygen (HBO) and topical gaseous oxygen (TGO), mainly employ gaseous oxygen delivery, which is much less effective in penetrating the skin. Here, we introduce an oxygen-producing patch, made of living microalgae hydrogel, which can produce dissolved oxygen. The superior performance of the patch that results from its dissolved oxygen delivery is >100-fold much more efficient than TGO penetrating the skin. Further experiments indicate that the patch could promote cell proliferation, migration, and tube formation in vitro, and improve chronic wound healing and the survival of skin grafts in diabetic mice. We believe that the microalgae-gel patch can provide continuous dissolved oxygen to improve chronic wound healing.