The vascular changes in periodontal tissues cause local hypoxia which seems to affect the periodontal tissue cells. Abrupt changes in oxygen availability within the periodontium have been suggested to have a regulatory role in alveolar bone remodeling during tooth movement, bone growth or fracture healing. The purpose of this study was to study the effects of hypoxia on formation of osteoclast responsible for bone resorption, in vitro. Primary mouse bone marrow cells were cultured in normoxic (20% $O_2$) and hypoxic (1% $O_2$) conditions and assayed for cellular proliferation. The results obtained were as follows : 1. Reducing oxygen tension increased the formation of multinucleated osteoclasts. 2. Hypoxic stimulus increased the size of mature osteoclasts.