Tissue oxygenation in general and hypoxia in particular are important regulators of retinal physiology and pathophysiology. Reduced oxygen tension and hypoxia-inducible transcription factors along with some of their target genes are critically involved in retinal development, and especially in the generation of a normal retinal vasculature. Well-timed hypoxia is thus vital for the young eye to establish proper retinal function and vision. However, when hypoxia is ill-timed, reduced oxygen tension may be associated with the development of retinal pathologies, including retinopathy of prematurity, diabetic retinopathy, glaucoma, age-related macular degeneration, or high altitude retinopathy. Here, reduced oxygen tension activates a hypoxic response that culminates in an increased expression of vascular endothelial growth factor. This causes pathological neovascularization of the delicate neuronal retina, a process that may ultimately lead to loss of vision. In contrast, preconditioning by well-defined and controlled short-term hypoxia is not devastating for the retina but instead induces a molecular response that provides protection to neuronal cells. Detailed investigation of hypoxic mechanisms during development and adulthood may thus reveal factors, which may be targeted by therapeutic approaches to save and preserve vision in patients.