A major challenge facing the development of effective cell therapies is the efficient differentiation of pluripotent stem cells (PSCs) into pure populations. Lowering oxygen tension to physiological levels can affect both the expansion and differentiation stages. However, to date, there are no studies investigating the knock-on effect of culturing PSCs under low oxygen conditions on subsequent lineage commitment at ambient oxygen levels. PSCs were passaged three times at 2% O2 before allowing cells to spontaneously differentiate as embryoid bodies (EBs) in high oxygen (20% O2) conditions. Maintenance of mouse PSCs in low oxygen was associated with a significant increase in the expression of early differentiation markers FGF5 and Eomes, while conversely we observed decreased expression of these genes in human PSCs. Low oxygen preconditioning primed mouse PSCs for their subsequent differentiation into mesodermal and endodermal lineages, as confirmed by increased gene expression of Eomes, Goosecoid, Brachyury, AFP, Sox17, FoxA2, and protein expression of Brachyury, Eomes, Sox17, FoxA2, relative to high oxygen cultures. The effects extended to the subsequent formation of more mature mesodermal lineages. We observed significant upregulation of cardiomyocyte marker Nkx2.5, and critically a decrease in the number of contaminant pluripotent cells after 12 days using a directed cardiomyocyte protocol. However, the impact of low oxygen preconditioning was to prime human cells for ectodermal lineage commitment during subsequent EB differentiation, with significant upregulation of Nestin and β3-tubulin. Our research demonstrates the importance of oxygen tension control during cell maintenance on the subsequent differentiation of both mouse and human PSCs, and highlights the differential effects.