The effect of severe acute hypoxia (fractional concentration of inspired oxygen equalled 0.104) was studied in nine male subjects performing an incremental exercise test. For power outputs over 125 W, all the subjects in a state of hypoxia showed a decrease in oxygen consumption (VO2) relative to exercise intensity compared with normoxia (P < 0.05). This would suggest an increased anaerobic metabolism as an energy source during hypoxic exercise. During submaximal exercise, for a given VO2, higher blood lactate concentrations were found in hypoxia than in normoxia (P < 0.05). In consequence, the onset of blood lactate accumulation (OBLA) was shifted to a lower VO2 (VO2 1.77 l.min-1 in hypoxia vs 3.10 l.min-1 in normoxia). Lactate concentration increases relative to minute ventilation (VE) responses were significantly higher during hypoxia than in normoxia (P < 0.05). At OBLA, VE during hypoxia was 25% lower than in the normoxic test. This study would suggest that in hypoxia subjects are able to use an increased anaerobic metabolism to maintain exercise performance.