The cellular microenvironment, together with intrinsic regulators, shapes stem cell identity and differentiation capacity. Mammalian early embryos are exposed to hypoxia in vivo and appear to benefit from hypoxic culture in vitro. Yet, how hypoxia influences stem cell transcriptional networks and lineage choices remain poorly understood. Here, we investigated the molecular effects of acute and prolonged hypoxia on embryonic and extra-embryonic stem cells as well as the functional impact on differentiation potential. We find a temporal and cell type-specific transcriptional response including an early primitive streak signature in hypoxic embryonic stem cells mediated by HIF1α. Using a 3D gastruloid differentiation model, we show that hypoxia-induced T expression enables symmetry breaking and axial elongation in the absence of exogenous WNT activation. When combined with exogenous WNT activation, hypoxia enhances lineage representation in gastruloids, as demonstrated by highly enriched signatures of gut endoderm, notochord, neuromesodermal progenitors and somites. Our findings directly link the microenvironment to stem cell function and provide a rationale supportive of applying physiological conditions in models of embryo development.
