A catastrophic extinction occurred at the end of the Permian Period. However, baseline extinction rates appear to have been elevated even before the final catastrophe, suggesting sustained environmental degradation. For terrestrial vertebrates during the Late Permian, the combination of a drop in atmospheric oxygen plus climate warming would have induced hypoxic stress and consequently compressed altitudinal ranges to near sea level. Our simulations suggest that the magnitude of altitudinal compression would have forced extinctions by reducing habitat diversity, fragmenting and isolating populations, and inducing a species-area effect. It also might have delayed ecosystem recovery after the mass extinction.