Low level of oxygen at the site of injury is likely to affect the viability and proliferation of the transplanted mesenchymal stromal cells (MSCs). Hence there is a need to understand the effect of the physical environment on transplanted stromal cells. Therefore, we have studied the effect of the duration of hypoxic exposure alone or in combination with normoxia on placenta derived mesenchymal stem cell (PDMSCs). PDMSCs and bone marrow MSCs (BMMSCs) were analysed under four different culture conditions, exposure to direct normoxia (N), direct hypoxia (H) and intermittent normoxia followed by hypoxia (NH) and intermittent hypoxia followed by normoxia (HN). The effect on morphology, proliferation, metabolic activity by MTT (3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyl-tetrazolium bromide) and viability by 7AAD (7-amino-actinomycin D) were assayed, along with markers for MSCs and HLADR. No change in morphology, marker expression or HLADR was detected in N, H, NH or HN. An increase in proliferation rate, decrease in population doubling-time (PDT) and a relative increase in metabolic activity was strongly noted in the order: NH, N/HN and H. No significant difference was observed in the viability between N, H, NH or HN. A similar pattern was also observed in BMMSCS, indicating comparable suitability of PDMSCs in therapeutic applications. Thus we conclude that intermittent exposure to normoxia prior to hypoxic exposure is a better option than direct exposure to hypoxia. This may have clinical relevance in that they probably mirror the in vivo scenario of systemic delivery (NH) of cells as opposed to local delivery (H), thereby suggesting that systemic delivery is better than local delivery.