Adipose-derived stem cells (ASCs) have been found adapted to a specific niche with low oxygen tension (hypoxia) in the body. As an important component of this niche, oxygen tension has been known to play a critical role in the maintenance of stem cell characteristics. However, the effect of O-2 tension on their functional properties has not been well determined. In this study, we investigated the effects of O-2 tension on ASCs sternness, differentiation and proliferation ability. Human ASCs were cultured under normoxia (21% O-2) and hypoxia (2% O-2). We found that hypoxia increased ASC sternness marker expression and proliferation rate without altering their morphology and surface markers. Low oxygen tension further enhances the chondrogenic differentiation ability, but reduces both adipogenic and osteogenic differentiation potential. These results might be correlated with the increased expression of HIF-1 alpha under hypoxia. Taken together, we suggest that growing ASCs under 2% O-2 tension may be important in expanding ASCs effectively while maintaining their functional properties for clinical therapy, particularly for the treatment of cartilage defects. (C) 2014 Elsevier Inc. All rights reserved.