Hydrogen Peroxide reacts with the catalase in the blood, releasing oxygen.
This process hasn't been worked out, but here's a paste of the possible reaction:
The chemistry of catalase catalysis has not been precisely solved yet, but the following, which is similar to the mechanism of cytochrome c peroxidase, has been proposed. The catalytic process is thought to occur in two stages:
H2O2 + Fe(III)-E -- H2O +O=Fe(IV)-E (1)
H2O2 + O=Fe(IV)-E -- H2O + Fe(III)-E (2)
this probably confuses things, so I'll leave it at that.