Mammalian cells express multiple 2-oxoglutarate (OG)-dependent dioxygenases, including many chromatin regulators. The oxygen affinities, and hence oxygen sensing capabilities, of the 2-oxoglutarate (OG)-dependent dioxygenases reported to date vary widely. Hypoxia can affect chromatin, but whether this reflects a direct effect on chromatin-modifying dioxygenases, or indirect effects caused by the hypoxic-induction of the HIF transcription factor or the endogenous 2-OG competitor 2-hydroxyglutarate (2-HG), is unclear. Here we report that hypoxia induces a HIF-and 2-HG-independent histone modification signature consistent with KDM inactivation. We also show that the H3K27 histone demethylase KDM6A (also called UTX), but not its paralog KDM6B, is oxygen-sensitive. KDM6A loss, like hypoxia, prevented H3K27me3 erasure and blocked differentiation. Conversely, restoring H3K27me3 homeostasis in hypoxic cells reversed these effects. Therefore, oxygen directly affects chromatin regulators to control cell fate.