AbstractArticular cartilage is an avascular tissue with chondrocytes in the deeper zones existing under conditions of sustained hypoxia. Using a hypoxic chamber to provide controlled hypoxia, this study was performed to determine whether sustained hypoxia enhances the production of cartilage matrix proteins. Freshly isolated primary bovine articular chondrocytes were encapsulated in three‐dimensional alginate beads and maintained at 2% oxygen with media changes using media pre‐equilibrated to 2% oxygen. Immunolocalization of HIF‐1α was performed to verify hypoxic conditions. Sustained hypoxia resulted in an increase in proteoglycan synthesis after only 1 day, as measured by 35S‐sulfate incorporation. This increase was maintained for the duration of the 17 day study. After 17 days of hypoxic culture, increases in total type II collagen and COL2A1 gene expression were probed by indirect immunofluorescence, type II collagen ELISA, and real‐time qPCR; in addition, increased glycosaminoglycan deposition was observed as determined by chemical analysis. These studies show that sustained hypoxia enhances articular chondrocyte matrix synthesis and viability in three‐dimensional alginate culture. © 2008 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 27: 793–799, 2009