BACKGROUND: Human adipose tissue-derived stem cells (ADSCs) are attractive multipotent stem cell sources with therapeutic potential in various fields requiring repair and regeneration, such as acute and chronically damaged tissues. ADSC is suitable for cell-based therapy, but its use has been hampered due to poor survival after administration. Potential therapeutic use of ADSC requires mass production of cells through in vitro expansion. Many studies have consistently observed the tendency of senescence by mesenchymal stem cell (MSC) proliferation upon expansion. Hypoxia has been reported to improve stem cell proliferation and survival. METHODS: We investigated the effects of hypoxia pretreatment on ADCS proliferation, migration capacity, differentiation potential and cytokine production. We also analyzed the effects of vascular endothelial growth factor (VEGF) on osteogenic and chondrogenic differentiation of ADSCs by hypoxia pretreatment. RESULTS: Hypoxia pretreatment increased the proliferation of ADSCs by increasing VEGF levels. Interestingly, hypoxia pretreatment significantly increased chondrogenic differentiation but decreased osteogenic differentiation compared to normoxia. The osteogenic differentiation of ADSC was decreased by the addition of VEGF but increased by the depletion of VEGF. We have shown that hypoxia pretreatment increases the chondrogenic differentiation of ADSCs while reducing osteogenic differentiation in a VEGF-dependent manner. CONCLUSION: These results show that hypoxia pretreatment can provide useful information for studies that require selective inhibition of osteogenic differentiation, such as cartilage regeneration.