Oxygen sensing is central to metazoan biology and has implications for human disease. Mammalian cells express multiple oxygen-dependent enzymes called 2-oxoglutarate (OG)-dependent dioxygenases (2-OGDDs), but they vary in their oxygen affinities and hence their ability to sense oxygen. The 2-OGDD histone demethylases control histone methylation. Hypoxia increases histone methylation, but whether this reflects direct effects on histone demethylases or indirect effects caused by the hypoxic induction of the HIF (hypoxia-inducible factor) transcription factor or the 2-OG antagonist 2-hydroxyglutarate (2-HG) is unclear. Here, we report that hypoxia promotes histone methylation in a HIF-and 2-HG-independent manner. We found that the H3K27 histone demethylase KDM6A/UTX, but not its paralog KDM6B, is oxygen sensitive. KDM6A loss, like hypoxia, prevented H3K27 demethylation and blocked cellular differentiation. Restoring H3K27 methylation homeostasis in hypoxic cells reversed these effects. Thus, oxygen directly affects chromatin regulators to control cell fate.