Cell transplantation is emerging as a promising new approach to replace scarred, nonfunctional myocardium in a diseased heart. At present, however, generating the numbers of donor cardiomyocytes required to develop and test animal models is a major limitation. Embryonic stem (ES) cells may be a promising source for therapeutic applications, potentially providing sufficient numbers of functionally relevant cells for transplantation into a variety of organs. We developed a single‐step bioprocess for ES cell‐derived cardiomyocyte production that enables both medium perfusion and direct monitoring and control of dissolved oxygen. Implementation of the bioprocess required combining methods to prevent ES cell aggregation (hydrogel encapsulation) and to purify for cardiomyocytes from the heterogeneous cell populations (genetic selection), with medium perfusion in a controlled bioreactor environment. We used this bioprocess to investigate the effects of oxygen on cardiomyocyte generation. Parallel vessels (250 mL culture volume) were run under normoxic (20% oxygen tension) or hypoxic (4% oxygen tension) conditions. After 14 days of differentiation (including 5 days of selection), the cardiomyocyte yield per input ES cell achieved in hypoxic vessels was 3.77 ± 0.13, higher than has previously been reported. We have developed a bioprocess that improves the efficiency of ES cell‐derived cardiomyocyte production, and allows the investigation of bioprocess parameters on ES cell‐derived cardiomyogenesis. Using this system we have demonstrated that medium oxygen tension is a culture parameter that can be manipulated to improve cardiomyocyte yield. © 2005 Wiley Periodicals, Inc.