Alginate beads represent a simple and highly reproducible in vitro model system for diffusion-limited bacterial growth. In this study, alginate beads were inoculated with Pseudomonas aeruginosa and followed for up to 72 h. Confocal microscopy revealed that P. aeruginosa formed dense clusters similar in size to in vivo aggregates observed ex vivo in cystic fibrosis lungs and chronic wounds. Bacterial aggregates primarily grew in the bead periphery and decreased in size and abundance toward the center of the bead. Microsensor measurements showed that the O2 concentration decreased rapidly and reached anoxia ∼100 μm below the alginate bead surface. This gradient was relieved in beads supplemented with NO3− as an alternative electron acceptor allowing for deeper growth into the beads. A comparison of gene expression profiles between planktonic and alginate-encapsulated P. aeruginosa confirmed that the bacteria experienced hypoxic and anoxic growth conditions. Furthermore, alginate-encapsulated P. aeruginosa exhibited a lower respiration rate than the planktonic counterpart and showed a high tolerance toward antibiotics. The inoculation and growth of P. aeruginosa in alginate beads represent a simple and flexible in vivo-like biofilm model system, wherein bacterial growth exhibits central features of in vivo biofilms. This was observed by the formation of small cell aggregates in a secondary matrix with O2-limited growth, which was alleviated by the addition of NO3− as an alternative electron acceptor, and by reduced respiration rates, as well as an enhanced tolerance to antibiotic treatment.