The vertebrate retina is a highly multilayered nervous tissue with a large diversity of cellular components. With the development of stem cell technologies, human retinas can be generated in three-dimensional (3-D) culture in vitro. However, understanding the factors modulating key productive processes and the way that they influence development are far from clear. Oxygen, as the most essential element participating in metabolism, is a critical factor regulating organic development. In this study, using 3-D culture of human stem cells, we examined the effect of intermittent high oxygen treatment (40% O2) on the formation and cellular behavior of neural retinas (NR) in the embryonic body (EB). The volume of EB and number of proliferating cells increased significantly under 40% O2 on day 38, 50, and 62. Additionally, the ratio of PAX6+ cells within NR was significantly increased. The neural rosettes could only develop with correct apical-basal polarity under 40% O2. In addition, the generation, migration and maturation of retinal ganglion cells were enhanced under 40% O2. All of these results illustrated that 40% O2 strengthened the formation of NR in EB with characteristics similar to the in vivo state, suggesting that the hyperoxic state facilitated the retinal development in vitro.