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Oxygen is essential to contemporary life, providing the major electron sink underlying cellular energy metabolism. In addition to providing energy, largely involving redox reactions within mitochondriaoxidative metabolism produces reactive byproducts that are damaging to cellular components. Eukaryotic organisms have evolved multiple physiological mechanisms and signaling pathwaysto deal with fluctuating levels of oxygen and reactive oxygen species (ROS), and many of these are used in animals to regulate developmental processes. Here we review recent findings showing how mitochondria, ROS and hypoxia signaling contribute to the regulation of early axial patterning in embryos, to nervous system development, and to the regulation of cell proliferation and differentiation during development and regeneration.