Dissolved oxygen (DO) is proving to be one of the most important abiotic factors determining growth and survival of juvenile estuarine fish. In shallow, throughout estuarine systems, low DO can occur in two broad categories: a diel oscillating pattern resulting in repeated nocturnal hypoxia due to the photosynthesis-respiration cycle of algal populations, or as prolonged bottom water hypoxia or anoxia caused by stratification. A series of laboratory experiments was conducted to characterize the physiological performance of juvenile southern flounder, Paralichthys lethostigma, (55-65 mm TL) exposed to four treatments of DO: (1) constant normoxia (6.50+/-0.50 mg O(2) l(-1)), (2) constant hypoxia (2.79+/-0.19 mg O(2) l(-1)), (3) constant intermediate hypoxia (4.74+/-0.18 mg O(2) l(-1)), and (4) an oscillating oxygen environment cycling dielly between the normoxic and hypoxic levels (2.8-6.2 mg O(2) l(-1), daily mean=4.40 mg O(2) l(-1)). Routine respiration was positively correlated with DO level and increased significantly during the day in the oscillating treatment in response to increasing DO. Ventilation rates were negatively correlated with the DO level in the constant treatments and increased significantly at night in the oscillating treatment in response to nocturnal hypoxia. Similarly, hematocrit levels were negatively related to DO levels in the constant treatments after 5 and 26 days of exposure to the treatments. Hematocrit levels also increased significantly the oscillating treatment, apparently in response to the episodic nocturnal hypoxia. Growth was significantly reduced in the 2.8 mg O(2) l(-1) treatment and the oscillating treatment but not in the 4.7 mg O(2) l(-1) treatment. Acclimation was evident by an increase in growth rates from week 2 to week 3 and a decrease in hematocrit levels between 5 and 26 days of exposure in the 2.7 and 4.5 mg O(2) l(-1) treatments but was not evident in the normoxic or oscillating treatments. These results suggest that a juvenile fish must remain in even moderately low DO in order for acclimation to occur. The research presented demonstrates that correctly assessing habitat quality in terms of DO requires knowledge of a fish's physiological and environmental history.