The enormous regenerative capacity of the blood system to sustain functionally mature cells are generated from highly proliferative, short-lived progenitors, which in turn arise from a rare population of pluripotent and self-renewing hematopoietic stem cells (HSC). In the bone marrow, these stem cells are kept in a low proliferative, relatively quiescent state in close proximity to stromal cells and osteoblasts, forming specialized niches. The interaction in particular to bone is crucial to prevent exhaustion of HSCs from uncontrolled cell-cycle entry and to excessive proliferation. In addition, the niche and its components protect stem cells from stress, such as accumulation of reactive oxygen species and DNA damage. One of the key issues is to identify conditions to increase the number of HSCs, either in vivo or during ex vivo growth cultures. This task has been very difficult to resolve and most attempts have been unsuccessful. However, the mechanistic insights to HSC self-renewal and preservation are gradually increasing and there is now hope that future research will enable scientists and clinicians to modulate the process. In this review, we will focus on the molecular mechanisms of self-renewal and HSC maintenance in the light of novel findings that HSCs reside at the lowest end of an oxygen gradient. Hypoxia appears to regulate hematopoiesis in the bone marrow by maintaining important HSC functions, such as cell cycle control, survival, metabolism, and protection against oxidative stress. To improve the therapeutic expansion of HSCs we need to learn more about the molecular mechanisms of hypoxia-mediated regulation.