In glucose homeostasis, glucose concentration is sensed by its metabolism through glucokinase (GCK) and oxidative phosphorylation. Because oxidative phosphorylation is an integral part of the sensory system, glucose sensing is necessarily dependent on oxygen pressure. Much of the dependence on oxygen is suppressed by location of glucose sensing cells in tissues with well-regulated blood flow. In healthy individuals the oxygen dependence is primarily observed in response to transient global hypoxia events such as during birth or transition to high altitude. The GCK sensing system is, however, used to control release of both insulin and glucagon, the preeminant hormonal regulators of blood glucose, as well as glucose sensitive neuronal activity. Suppression of oxygen delivery to glucose-sensing cells or interference with regulation of tissue blood flow by either local or systemic causes, stresses the glucose regulatory system. This is true whether the stress is imposed locally, such as by altered oxygen delivery to the pancreas, or globally, as in pulmonary insufficiency or exposure to high altitude. It may be expected that chronic application of this stress predisposes individuals to developing diabetes. Type 2 diabetes is a broad class of diseases characterized by disturbance of glucose homeostasis, i.e., having either hyperglycemia and/or decreased sensitivity to insulin. Given the role of oxidative phosphorylation in glucose sensing, tissue oxygen deprivation may predispose individuals to developing diabetes as well as contributing to the disease itself. This is particularly true in age-related diabetes because the incidence of vascular insufficiency increases markedly with increasing age. NEW & NOTEWORTHY Glucose sensing requires glucose metabolism through glycolysis and oxidative phosphorylation. Dependence of the latter on oxygen concentration imposes an oxygen dependence on glucose sensing. We have used a validated computational model to quantify that dependence. Evidence is presented that tissue oxygenation plays an important role in predisposition of individuals to developing type 2 diabetes and in progression of the disease.