Continuously monitoring specific biomarkers offer a promising method to interrogate disease status and progression. In this work we have demonstrated a composite hydrogel-based sensing platform that may be used for optical detection of lactate. The sensor design consists of microsized enzymatic sensors that are embedded in an outer hydrogel matrix. In these engineered microdomains, encapsulated lactate oxidase serves as the bioactive component, phosphorescent metalloporphyrin acts as the optical transducer, and polyelectrolyte multilayers coated on the enzymatic microsensors control the permeation of lactate into the microsensors. The response of the composite hydrogel-based lactate sensors was characterized by subjecting the sensors to lactate concentration challenges at low physiological oxygen levels. The analytical range and the mean sensitivity were determined to be 9.2 ± 0.83 mg/dL and 11 ± 0.90% dL mg-1, respectively. Repeated cyclic exposure to high levels of lactate revealed that these sensors were extremely stable, with no significant loss in sensor response after 20 cycles. These preliminary results support the premise that these composite hydrogels are capable of continuous lactate tracking and have the potential for use as fully implantable optical lactate sensors.