The reconstruction of bone defects remains challenging. The utilization of bone autografts, although quite promising, is limited by several drawbacks, especially substantial donor site complications. Recently, strontium (Sr), a bioactive trace element with excellent osteoinductive, osteoconductive, and pro-angiogenic properties, has emerged as a potential therapeutic agent for bone repair. Herein, a strontium peroxide (SrO2)-loaded poly(lactic-co-glycolic acid) (PLGA)-gelatin scaffold system was developed as an implantable bone substitute. Gelatin sponges serve as porous osteoconductive scaffolds, while PLGA not only reinforces the mechanical strength of the gelatin but also controls the rate of water infiltration. The encapsulated SrO2 can release Sr2+ in a sustained manner upon exposure to water, thus effectively stimulating the proliferation of osteoblasts and suppressing the formation of osteoclasts. Moreover, SrO2 can generate hydrogen peroxide and subsequent oxygen molecules to increase local oxygen tension, an essential niche factor for osteogenesis. Collectively, the developed SrO2-loaded composite scaffold shows promise as a multifunctional bioactive bone graft for bone tissue engineering.