The present invention relates to a novel implantable biosensor and method for sensing products, such as hydrogen peroxide, generated from an enzymatic reaction between an analyte, like glucose, and an enzyme in the presence of oxygen. The novel implantable biosensor is uniquely equipped with an enclosed chamber for containing oxygen and can be adapted for extracting oxygen from animal tissue adjacent the container. The reservoir of oxygen contained in the enclosed chamber is supplied to the enzymatic reaction from both sides of a membrane. The enclosed chamber is uniquely designed to be impermeable to substances, like liquid and cells, that possibly can interfere with the supply of the oxygen permeating through the membrane to the enzymatic reaction. Also, the implantable biosensor is designed to optically or electrically sense products generated from the enzymatic reaction which serve as a function of the analyte.