Oxygen is vital to nearly all forms of life on Earth via its role in energy homeostasis and other cell functions. Until recently, the effects of oxygen on the proliferation and differentiation of neural stem cells (NSCs) have been largely ignored. Some studies have been carried out on the basis of the fact that NSCs exists within a "physiological hypoxic" environment at 1 to 5% O2 in both embryonic and adult brains. The results showed that hypoxia could promote the growth of NSCs and maintain its survival in vitro. In vivo studies also showed that ischemia/hypoxia increased the number of endogenous NSCs in the subventricular zone and dentate gyrus. In addition, hypoxia could influence the differentiation of NSCs. More neurons, especially more doparminergic neurons, were produced under hypoxic condition. The effects of hypoxia on the other kind of stem cell were briefly introduced as additional evidence. The mechanism of these responses might be primarily involved in the hypoxic inducible factor-1 (HIF-1) signal pathway. The present review summarizes recent works on the role of hypoxia in the proliferation and differentiation of NSCs both in vitro and in vivo, and the mechanism involved in HIF-1 signaling pathway behind this response was also discussed.