Testicular teratomas and teratocarcinomas are the most common testicular germ cell tumors in early childhood and young men, and they are frequently found unilaterally in the left testis. In 129/SvJ mice carrying a heterozygous copy of the potent modifier of tumor incidenceTer, a point mutation in the dead-end homolog one gene (Dnd1Ter/+), ∼70% of the unilateral teratomas arise in the left testis. We previously showed that in mice, left/right differences in vascular architecture are associated with reduced hemoglobin saturation and increased levels of the hypoxia inducible factor-1 alpha (HIF-1α) in the left compared to the right testis. To test the hypothesis that systemic reduction of oxygen availability inDnd1Ter/+mice would lead to an increased incidence of bilateral tumors, we placed pregnant females from 129/SvJDnd1Ter/+intercross matings in a hypobaric chamber for 12-h intervals. Our results show that in 129/SvJDnd1Ter/+male gonads, the incidence of bilateral teratoma increased from 3.3% to 64% when fetuses were exposed to acute low oxygen conditions for 12-h between E13.8 and E14.3. The increase in tumor incidence correlated with the maintenance of high expression of pluripotency genesOct4,Sox2andNanog, elevated activity of the Nodal signaling pathway, and suppression of germ cell mitotic arrest. We propose that the combination of heterozygosity for theTermutation and hypoxia causes a delay in male germ cell differentiation that promotes teratoma initiation.