Oxygen has two faces. On one side it is the terminal electron acceptor of aerobic respiration - the most efficient engine of energy metabolism. On the other hand, oxygen is toxic because the reduction of molecular O2 creates reactive oxygen species such as the superoxide anion, peroxide, and the hydroxyl radical. Probably most prokaryotes, and virtually all eukaryotes, depend on oxygen respiration, and we show that the ambiguous relation to oxygen is both an evolutionary force and a dominating factor driving functional interactions and the spatial structure of microbial communities.We focus on microbial communities that are specialised for life in concentration gradients of oxygen, where they acquire the full panoply of specific requirements from limited ranges of PO2, which also support the spatial organisation of microbial communities. Marine and lake sediments provide examples of steep O2 gradients, which arise because consumption or production of oxygen exceeds transport rates of molecular diffusion. Deep lakes undergo thermal stratification in warm waters, resulting in seasonal anaerobiosis below the thermocline, and lakes with a permanent pycnocline often have permanent anoxic deep water. The oxycline is here biologically similar to sediments, and it harbours similar microbial biota, the main difference being the spatial scale. In sediments, transport is dominated by molecular diffusion, and in the water column, turbulent mixing dominates vertical transport. Cell size determines the minimum requirement of aerobic organisms. For bacteria (and mitochondria), the half-saturation constant for oxygen uptake ranges within 0.05-0.1% atmospheric saturation; for the amoeba Acanthamoeba castellanii it is 0.2%, and for two ciliate species measuring around 150 microm, it is 1-2 % atmospheric saturation. Protection against O2 toxicity has an energetic cost that increases with increasing ambient O2 tension. Oxygen sensing seems universal in aquatic organisms. Many aspects of oxygen sensing are incompletely understood, but the mechanisms seem to be evolutionarily conserved. A simple method of studying oxygen preference in microbes is to identify the preferred oxygen tension accumulating in O2 gradients. Microorganisms cannot sense the direction of a chemical gradient directly, so they use other devices to orient themselves. Different mechanisms in different prokaryotic and eukaryotic microbes are described. In O2 gradients, many bacteria and protozoa are vertically distributed according to oxygen tension and they show a very limited range of preferred PO2. In some pigmented protists the required PO2 is contingent on light due to photochemically generated reactive oxygen species. In protists that harbour endosymbiotic phototrophs, orientation towards light is mediated through the oxygen production of their photosynthetic symbionts. Oxygen plays a similar role for the distribution of small metazoans (meiofauna) in sediments, but there is little experimental evidence for this. Thus the oxygenated sediments surrounding ventilated animal burrows provide a special habitat for metazoan meiofauna as well as unicellular organisms.