Skin-derived precursors (SKPs) have potential to differentiate to various cell types including osteoblasts, adipocytes and neurons. SKPs are a candidate for cell-based therapy since they are easily accessible and have multipotency. Most mammalian cells are exposed to a low oxygen environment with 1 to 5% O2 concentration in vivo, while 21% O2 concentration is common in in vitro culture. The difference between in vitro and in vivo O2 concentration may affect to the behavior of cultured cells. In this report, we investigated the effect of hypoxic condition on stemness and proliferation of SKPs. The results indicated that SKPs exposed to hypoxic condition for 5 days showed no change in proliferation. In terms of mRNA expression, hypoxia maintained expression of stemness markers; whereas, oncogenes, such as Klf4 and c-Myc, were downregulated, and the expression of Nestin, related to cancer migration, was also downregulated. Thus, SKPs cultured in hypoxia may reduce the risk of cancer in SKP cell-based therapy.