Engineered living materials (ELMs) are achieved by combining live cells with biomaterial matrices, creating responsive materials capable of bioremediation, green energy production, and in situ production of biomolecules. Bacteria cells are an attractive option for the living component as they have a range of functionalities, are programmable, and are responsive to their environment. Hydrogels are typically used as the material component as they are biocompatible and can effectively encapsulate nanoparticles, bacteria, or enzymes. A significant limitation of these materials is maintaining bacterial activity/viability in harsh/toxic environments. In this study, polyethylene glycol (PEG) hydrogels are used to encapsulate bovine liver catalase (BLC) to protect Bacillus subtilis, a model gram-positive soil-dwelling bacteria, from reactive oxygen stress. B. subtilis is widely known for its ability to sporulate and for the bioproduction of secondary metabolites, some with antimicrobial or anticancer properties. Two hydrogels of different crosslinking chemistries (PEG diacrylate/PEG tetra thiol and PEG divinyl sulfone-PEG tetra thiol) were first exposed to a range of hydrogen peroxide concentrations to assess the long-term stability required for the protective coatings. PEG divinyl sulfone-PEG tetrathiol (PEGVS-PEGTT) hydrogels displayed hydrolytic stability for over 60 days when exposed to concentrations of up to 1,197 mg/L (35.2mM) H2O2. The activity of encapsulated BLC was measured to obtain the Michaelis constant and maximum velocity. With quantification of the hydrogen peroxide diffusion coefficient through PEG hydrogels, a finite element analysis was created to simulate spatiotemporal dosing using a diffusion-based microfluidic device. After verifying this model, the response of bacteria encapsulated in these protective hydrogels after exposure to hydrogen peroxide was quantified using time-lapse fluorescent microscopy to assess the impact of these materials on cell viability and function.