The observation that ectotherm size decreases with increasing temperature (temperature‐size rule; TSR) has been widely supported. This phenomenon intrigues researchers because neither its adaptive role nor the conditions under which it is realized are well defined. In light of recent theoretical and empirical studies, oxygen availability is an important candidate for understanding the adaptive role behind TSR. However, this hypothesis is still undervalued in TSR studies at the geographical level. We reanalyzed previously published data about the TSR pattern in diatoms sampled from Icelandic geothermal streams, which concluded that diatoms were an exception to the TSR. Our goal was to incorporate oxygen as a factor in the analysis and to examine whether this approach would change the results. Specifically, we expected that the strength of size response to cold temperatures would be different than the strength of response to hot temperatures, where the oxygen limitation is strongest. By conducting a regression analysis for size response at the community level, we found that diatoms from cold, well‐oxygenated streams showed no size‐to‐temperature response, those from intermediate temperature and oxygen conditions showed reverse TSR, and diatoms from warm, poorly oxygenated streams showed significant TSR. We also distinguished the roles of oxygen and nutrition in TSR. Oxygen is a driving factor, while nutrition is an important factor that should be controlled for. Our results show that if the geographical or global patterns of TSR are to be understood, oxygen should be included in the studies. This argument is important especially for predicting the size response of ectotherms facing climate warming.