Mammalian preimplantation embryo development is a complex sequence of events. This period of development is sensitive to oxygen (O) levels that can affect various cellular processes. We compared the influence of O tension by culturing embryos either in normoxic (20% O) or physiological hypoxic (6% O) conditions, or sequential low O concentration starting with 6% O until 16-cell stage and then switching to ultrahypoxic conditions (2% O). Due to ethical concerns, we used bovine as an animal model with a good similarity of embryogenesis to human. We found that the cleavage rate was not affected by O levels but there was a clear difference in blastocyst formation rate. In hypoxia, 36% of embryos reached blastocyst stage while in normoxia only 13%. In ultrahypoxia conditions only 4.6% of embryos developed up to blastocyst stage. Transcriptomic profiles showed that normoxic conditions slowed down oocyte transcript degradation which is a prerequisite for reprogramming of the embryonic cell lineages. There were also clear differences in the expression of key metabolic enzymes between hypoxic and normoxic conditions at the blastocyst stage. Both hypoxic and ultrahypoxic conditions seemed to induce appropriate energy production by upregulating genes involved in glycolysis and lipid metabolism typical to in vivo embryos. In contrast, normoxic conditions failed to upregulate glycolysis genes and only depended on oxidative phosphorylation metabolism. We conclude that constant hypoxia culture of in vitro embryos provided the highest blastocyst formation rate and appropriate energy metabolism. Normoxia altered the energy metabolism and decreased the blastocyst formation rate. Even though ultrahypoxia at blastocyst stage resulted in the lowest blastocyst formation, the transcriptional profile of surviving embryos was normal.