The efficient generation of specific brain cells in vitro may serve as a source of cells for brain repair in several devastating neurological diseases. Production of dopaminergic neurons from precursor cells for transplantation in Parkinson's disease has become a major research goal. We found that murine mesencephalic neurospheres were viable and proliferated, preserved telomerase activity, pluripotency and dopaminergic commitment for many weeks when cultured in 3% O2, whereas exposing these cells to 21% oxygen prohibited long-term expansion. Microarray data suggest that a variety of genes related to the cell cycle, cell maturation and apoptosis are differentially regulated in midbrain-derived precursors cultured in 3 versus 21% oxygen after 1–2 months. Taken together, we hypothesize that sustained high oxygen has deleterious effects on the self-renewal capacity of mesencephalic neural precursors, possibly accelerating maturation and senescence resulting in overall cell loss. Gene regulation governed by low oxygen tension may be relevant to the normal development and survival of midbrain neurons.