To examine the critical effect of oxygen concentration on embryonic development, in vitro fertilized embryos were cultured in media(TCM199 vs. SOF) supplemented sera(1O% FCS vs. 10% HS) with and without bovine oviduct epithelial cells under two gas atmosphere (5% $CO_2$ in air vs. 5% $CO_2$, 5% $O_2$, 90% $N_2$). Oocytes, obtained from abattoir ovaries, were matured in EGF containing TCM199 medium co-cultured with BOEC for 24 hours, followed by exposure to frozen-thawed, heparin4reated spermatozoa in TALP for 30 hours. And then early embryos(1~2 cell) were cultured in both TCM199 and SOF supplemented with 10% FCS or 10% RS under 5% $CO_2$ in air or 5% COi, 5% $O_2$, 90% $N_2$. Development to morulae and blastocysts was recorded on days 7, after the start of in vitro fertilization. The developmental rates of in vitro fertilized embryos to morulae and blastocysts cultured in SOF with BOEC under 5% $CO_2$, 5% $O_2$, 90% $N_2$(24.4%) were significantly(p<0.05) higher than cultured in SOF with BOEC under 5% $CO_2$ in air(14.1%) at seven days after in vitro fertilization. When early bovine embryos were cultured in TCM 199 and SOF under two different gas atmosphere, there were no significant differences in the developmental rates to morulae and blastocysts between supplements of 10% FCS and 10% HS. The rates of development to morulae and blastocysts were significantly(p<0.01) higher in TCM 199 with BOEC(24.7%) than TCM199 without BOEC(10.9%) under 5% $CO_2$ in air, otherwise SOF without BOEC(36.4%) were significantly (p<0.05) higher than in SOF with BOEC (24.4%) under 5% $CO_2$, 5% $O_2$, 90% $N_2$. In summary, these experiments have proved that the culture system in SOF supplemented 10% ES is effective on in vitro development of early bovine embryos under 5% $CO_2$, 5% $O_2$, 90% $N_2$. In addition, it is effective to development of bovine embryos that TCM 199 should be co-cultured with BOEC and SOF should be cultured without somatic cells under two different gas atmosphere.