The Drosophila tracheal (respiratory) system is a tubular epithelial network that delivers oxygen to internal tissues. Sprouting of the major tracheal branches is stereotyped and controlled by hard-wired developmental cues. Here we show that ramification of the fine terminal branches is variable and regulated by oxygen, and that this process is controlled by a local signal or signals produced by oxygen-starved cells. We provide evidence that the critical signal is Branchless (Bnl) FGF, the same growth factor that patterns the major branches during embryogenesis. During larval life, oxygen deprivation stimulates expression of Bnl, and the secreted growth factor functions as a chemoattractant that guides new terminal branches to the expressing cells. Thus, a single growth factor is reiteratively used to pattern each level of airway branching, and the change in branch patterning results from a switch from developmental to physiological control of its expression.