Pluripotent stem cells have potential applications in regenerative medicine for 
diabetes. Differentiation of stem cells into insulin-producing cells has been 
achieved using various protocols. However, both the efficiency of the method and 
potency of differentiated cells are insufficient. Oxygen tension, the partial 
pressure of oxygen, has been shown to regulate the embryonic development of 
several organs, including pancreatic β-cells. In this study, we tried to 
establish an effective method for the differentiation of induced pluripotent 
stem cells (iPSCs) into insulin-producing cells by culturing under high oxygen 
(O2) conditions. Treatment with a high O2 condition in the early stage of 
differentiation increased insulin-positive cells at the terminus of 
differentiation. We found that a high O2 condition repressed Notch-dependent 
gene Hes1 expression and increased Ngn3 expression at the stage of pancreatic 
progenitors. This effect was caused by inhibition of hypoxia-inducible factor-1α 
protein level. Moreover, a high O2 condition activated Wnt signaling. Optimal 
stage-specific treatment with a high O2 condition resulted in a significant 
increase in insulin production in both mouse embryonic stem cells and human 
iPSCs and yielded populations containing up to 10% C-peptide-positive cells in 
human iPSCs. These results suggest that culturing in a high O2 condition at a 
specific stage is useful for the efficient generation of insulin-producing 
cells.