For fishes, the availability of dissolved oxygen (DO) can affect performance and fitness traits and influence distribution patterns. Hypoxia occurs naturally in habitats characterized by low mixing and/or light limitation such as dense wetlands and profundal zones of deep lakes. In addition, human activities are increasing the frequency and extent of aquatic hypoxia through eutrophication and pollution. Thus, it has become increasingly important to understand consequences of hypoxia for fishes and mechanisms that facilitate persistence in low-DO habitats. With strong specialization in some cichlid species and high levels of intraspecific variation in others, cichlids have been a key group for exploring strategies for dealing with hypoxia. These include behavioral responses (e.g. aquatic surface respiration), evolution of mechanisms to maximize oxygen uptake and delivery, metabolic depression, use of anaerobic metabolism, and air breathing in a few species. Despite the diversity of strategies that have permitted some cichlids to persist under extreme hypoxia, low DO can incur potential costs such as smaller body size. Such costs may be offset by benefits of hypoxic habitats such as reduced predation risk. This review details the mechanisms used by cichlids for tolerating hypoxia and the costs and benefits of hypoxia tolerance.