Abstract Subcutaneous delivery of cell therapy is an appealing minimally-invasive strategy for the treatment of various diseases. However, the subdermal site is poorly vascularized making it inadequate for supporting engraftment, viability, and function of exogenous cells. In this study, we developed a 3D bioprinted scaffold composed of alginate/gelatin (Alg/Gel) embedded with mesenchymal stem cells (MSCs) to enhance vascularization and tissue ingrowth in a subcutaneous microenvironment. We identified bio-ink crosslinking conditions that optimally recapitulated the mechanical properties of subcutaneous tissue. We achieved controlled degradation of the Alg/Gel scaffold synchronous with host tissue ingrowth and remodeling. Further, in a rat model, the Alg/Gel scaffold was superior to MSC-embedded Pluronic hydrogel in supporting tissue development and vascularization of a subcutaneous site. While the scaffold alone promoted vascular tissue formation, the inclusion of MSCs in the bio-ink further enhanced angiogenesis. Our findings highlight the use of simple cell-laden degradable bioprinted structures to generate a supportive microenvironment for cell delivery. Graphical Abstract