Myocardial infarction results in the formation of a hypoxic scar region. Resident stem cells have been discovered in the adult heart that may be expanded in vitro via the formation of cardiospheres. Administration of these cardiosphere-derived cells (CDC) to the infarcted heart has been shown to improve cardiac function; however, levels of stem cell retention are low. Preconditioning of CDC to a hypoxic environment may increase cell retention, promote proliferation within the scar and further improve cardiac function. CDC were cultured under 2% oxygen for 1 week. Proliferation rates were calculated and hypoxic inducible factor (HIF1α) protein expression and oxygen consumption were measured in intact cells over 1 week. CDC culture under hypoxia for 24 h increased HIF1α by 214% compared with control cells cultured under normoxia. After 1 week in hypoxia, however, there was no difference in HIF1α levels compared with controls. CDC proliferation was increased fivefold under hypoxia. CDC cultured under hypoxia had decreased oxygen consumption compared with control cells cultured under normoxia, with oxygen consumption decreased by 22% with both ADP and FCCP after 24 h. After 1 week of hypoxia, oxygen consumption was decreased by 92% with ADP and 94% with FCCP. Culture under hypoxia generated sufficient CDC for therapy more rapidly than under normoxia. The resulting CDC had reduced oxygen consumption and thus may be better adapted to survive within the hypoxic scar.