Oxidative stress and the resulting radical by-products cause significant toxicity and graft loss in cellular transplantation. Here, the engineering of an auto-catalytic, antioxidant, self-renewing cerium oxide nanoparticle (CONP)-composite hydrogel is reported. This enzyme-mimetic material ubiquitously scavenges ambient free radicals, with the potential to provide indefinite antioxidant protection. Here, we evaluated the potential of this system to enhance the protection of encapsulated beta cells. Co-incubation of CONPs, free in solution with beta cells, demonstrated potent cytoprotection from superoxide exposure; however, phagocytosis of the CONPs by the beta cells resulted in cytotoxicity at concentrations as low as 1 mM. When CONPs were embedded within alginate hydrogels, the composite hydrogel provided cytoprotection to encapsulated beta cells from free radical attack without cytotoxicity, even up to 10 mM concentrations. This nanocomposite hydrogel has wide applicability in cellular transplantation, with the unique advantage of localization of these potent antioxidant CONPs and their capacity for sustained, long-term scavenging.