Cells in the human body need oxygen to function and survive, and severe deprivation of oxygen, as occurs in ischaemic heart disease and stroke, is a major cause of mortality. Nevertheless, other organisms, such as the fossorial mole rat or diving seals, have acquired the ability to survive in conditions of limited oxygen supply. Hypoxia tolerance also allows the heart to survive chronic oxygen shortage, and ischaemic preconditioning protects tissues against lethal hypoxia. The recent discovery of a new family of oxygen sensors — including prolyl hydroxylase domain-containing proteins 1–3 (PHD1–3) — has yielded exciting novel insights into how cells sense oxygen and keep oxygen supply and consumption in balance. Advances in understanding of the role of these oxygen sensors in hypoxia tolerance, ischaemic preconditioning and inflammation are creating new opportunities for pharmacological interventions for ischaemic and inflammatory diseases.