Facial paralysis is a physically, psychologically, and socially disabling condition. Innovative treatment strategies based on regenerative medicine, in particular tissue engineering of skeletal muscle, are promising for treatment of patients with facial paralysis. The natural source for tissue-engineered muscle would be muscle stem cells, that is, human satellite cells (SC). In vivo, SC respond to hypoxic, ischemic muscle damage by activation, proliferation, differentiation to myotubes, and maturation to muscle fibers, while maintaining their reserve pool of SC. Therefore, our hypothesis is that hypoxia improves proliferation and differentiation of SC. During tissue engineering, a three-dimensional construct, or implanting SC in vivo, SC will encounter hypoxic environments. Thus, we set out to test our hypothesis on SC in vitro. During the first five passages, hypoxically cultured SC proliferated faster than their counterparts under normoxia. Moreover, also at higher passages, a switch from normoxia to hypoxia enhanced proliferation of SC. Hypoxia did not affect the expression of SC markers desmin and NCAM. However, the average surface expression per cell of NCAM was downregulated by hypoxia, and it also downregulated the gene expression of NCAM. The gene expression of the myogenic transcription factors PAX7, MYF5, and MYOD was upregulated by hypoxia. Moreover, gene expression of structural proteins α-sarcomeric actin, and myosins MYL1 and MYL3 was upregulated by hypoxia during differentiation. This indicates that hypoxia promotes a promyogenic shift in SC. Finally, Pax7 expression was not influenced by hypoxia and maintained in a subset of mononucleated cells, whereas these cells were devoid of structural muscle proteins. This suggests that during myogenesis in vitro, at least part of the SC adopt a quiescent, that is, reserve cells, phenotype. In conclusion, tissue engineering under hypoxic conditions would seem favorable in terms of myogenic proliferation, while maintaining the quiescent SC pool.