In vitro investigations of tumor stem-like cells (TSC) isolated from human glioblastoma (GB) surgical specimens have been done primarily at an atmospheric oxygen level of 20%. To determine whether an oxygen level more consistent with in situ conditions affects their stem cell–like characteristics, we compared GB TSCs grown under conditions of 20% and 7% oxygen. Growing CD133+ cells sorted from three GB neurosphere cultures at 7% O2 reduced their doubling time and increased the self-renewal potential as reflected by clonogenicity. Furthermore, at 7% oxygen, the cultures exhibited an enhanced capacity to differentiate along both the glial and neuronal pathways. As compared with 20%, growth at 7% oxygen resulted in an increase in the expression levels of the neural stem cell markers CD133 and nestin as well as the stem cell markers Oct4 and Sox2. In addition, whereas hypoxia inducible factor 1α was not affected in CD133+ TSCs grown at 7% O2, hypoxia-inducible factor 2α was expressed at higher levels as compared with 20% oxygen. Gene expression profiles generated by microarray analysis revealed that reducing oxygen level to 7% resulted in the up-regulation and down-regulation of a significant number of genes, with more than 140 being commonly affected among the three CD133+ cultures. Furthermore, Gene Ontology categories up-regulated at 7% oxygen included those associated with stem cells or GB TSCs. Thus, the data presented indicate that growth at the more physiologically relevant oxygen level of 7% enhances the stem cell–like phenotype of CD133+ GB cells.