Background: Trauma-induced heterotopic ossification (HO) is a complication that develops under three conditions: the presence of an osteogenic progenitor cell, an inducing factor, and a permissive environment. We previously showed that a mouse multipotent Sca1 + CD31 − Lin − muscle resident stromal cell (mrSC) population is involved in the development of HO in the presence of inducing factors, members of the bone morphogenetic protein family. Interestingly, BMP9 unlike BMP2 causes HO only if the muscle is damaged by injection of cardiotoxin. Because acute trauma often results in blood vessel breakdown, we hypothesized that a hypoxic state in damaged muscles may foster mrSCs activation and proliferation and trigger differentiation toward an osteogenic lineage, thus promoting the development of HO. Methods: Three-to-six-month-old male C57Bl/6 mice were used to induce muscle damage by injection of cardiotoxin intramuscularly into the tibialis anterior and gastrocnemius muscles. mrSCs were isolated from damaged (hypoxic state) and contralateral healthy muscles and counted, and their osteoblastic differentiation with or without BMP2 and BMP9 was determined by alkaline phosphatase activity measurement. The proliferation and differentiation of mrSCs isolated from healthy muscles was also studied in normoxic incubator and hypoxic conditions. The effect of hypoxia on BMP synthesis and Smad pathway activation was determined by qPCR and/or Western blot analyses. Differences between normally distributed groups were compared using a Student's paired t test or an unpaired t test. Results: The hypoxic state of a severely damaged muscle increased the proliferation and osteogenic differentiation of mrSCs. mrSCs isolated from damaged muscles also displayed greater sensitivity to osteogenic signals, especially BMP9, than did mrSCs from a healthy muscle. In hypoxic conditions, mrSCs isolated from a control muscle were more proliferative and were more prone to osteogenic differentiation. Interestingly, Smad1/5/8 activation was detected in hypoxic conditions and was still present after 5 days, while Smad1/5/8 phosphorylation could not be detected after 3 h of normoxic incubator condition. BMP9 mRNA transcripts and protein levels were higher in mrSCs cultured in hypoxic conditions. Our results suggest that low-oxygen levels in damaged muscle influence mrSC behavior by facilitating their differentiation into osteoblasts. This effect may be mediated partly through the activation of the Smad pathway and the expression of osteoinductive growth factors such as BMP9 by mrSCs. Conclusion: Hypoxia should be considered a key factor in the microenvironment of damaged muscle that triggers HO.