The ability to sense and respond to changes in oxygen is essential for the survival of prokaryotic and eukaryotic organisms. Oxygen-sensing mechanisms have been developed to maintain cell and tissue homeostasis, as well as to adapt to the chronic low-oxygen conditions found in diseases such as cancer. This report on the first Keystone Meeting on the Biology of Hypoxia will summarize our current understanding of key genes and pathways involved in oxygen sensing that are required for normal development and that are dysregulated in disease states. It will also comment on future directions for this exciting field.