The provision of supplemental oxygen for infants and children with hypoxaemia is expensive but advantageous because it facilitates earlier discharge from hospital and enhances quality of life in the home setting. It is seen as potentially cost effective and family friendly. However, the prescription of supplemental oxygen varies greatly between neonatologists, paediatric respiratory physicians and paediatric cardiologists. There is a lack of consensus on appropriate indications for prescribing oxygen, desirable oxygen targets and clinically significant immediate and longer-term outcome measures. Of the limited studies available, most are small studies reporting the treatment of infants with chronic neonatal lung disease with inconsistent outcome measures. Such data are not readily extrapolated to older children, who are also poorly served by existing data in adult studies. Further delineation of the indications for home oxygen therapy is required together with appropriately designed and funded multicentre trials to provide evidence for optimal oxygen therapy.