Orchestrated differentiation of embryonic stem cells into specific tissues or cells will be invaluable for xenotransplantation, biomedicine, and pharmacology. However, the lack of a standardized culture environment for establishment and maintenance of cell lines has hindered the application of this technology. In other cell types, O₂ concentration in the culture environment can have a profound effect on proliferation and differentiation. This study, therefore, tested the hypothesis that establishment dynamics, LDH isoforms, and mRNA expression patterns of the resulting cell lines would be affected by the O₂ tension in the culture environment. Blastocysts recovered from mice (C57BL/6) uteri on Day 4 (post coitis) were placed in Speciality Medium (4500 mg L^-1 glucose) DMEM (plus 0.01 μg mL^-1 LIF) and cultured in a gas environment of 5% CO₂ and either ~20% or 5% O₂. More (P < 0.05) blastocysts hatched and produced outgrowths (Day 4 of DMEM culture) in the low (76.7 ± 0.1%) compared to the high (58.3 ± 0.1%) O₂ group. Although the number of cells per outgrowth was similar between groups (low = 58.1 ± 5.2, high = 58.8 ± 5.7), a smaller number of colonies in the high O₂ group (9/15; 64.3%) stained positive for alkaline phosphatase relative to the low O₂ group (14/15; 93.3%). Oxygen treatment had no effect on the patterns of activity of the oxioreductase, lactate dehydrogenase (LDH), in either outgrowths or established stem cell lines. Interestingly, the stem cell lines (both O₂ groups) displayed multiple isoforms (Isoforms 3, 4, and 5) of LDH, whereas the outgrowths displayed only Isoform 5. In contrast, two-cell embryos and blastocysts displayed only Isoform 1, and fibroblasts displayed Isoforms 4 and 5. Expression (mRNA) profiles were developed from blastocyst outgrowths, stem cell colonies, and established stem cell lines cultured under either high or low O₂ tension, using a RT-PCR for LDH (Isozymes α and β) and a key regulatory enzyme of glycolysis, phosphofructokinase-2 (PFK2; Isozyme 1 and 2). There were no differences between the high and low O₂ groups in mRNA expression of LDHα in the outgrowths, or established stem cells. Expression of LDHβ was at a very low level regardless of O₂ treatment or cell type. Outgrowths from the low O₂ group expressed Isozyme 1 of PFK2 whereas the outgrowths from the high O₂ group did not. Enhanced expression of PFK2 is suggestive of increased glycolytic capacity. Reduced O₂ environment during the peri-hatching period had significant effects on the resulting embryonic stem cells, supporting the hypothesis that O₂ tension can affect stem cell establishment and maintenance.