As selection pressures exist for not only adults, but for every life history stage, it is important to understand how environmental factors shape developing animals. Despite the significance placed on aquatic hypoxia as a driving force in the evolution of air breathing, this is the first known study to examine the effects of hypoxia on cardio-respiratory ontogeny of an air breathing fish. Blue gouramis are obligatory air breathing fish that possess a labyrinth-like structure that serves as the air breathing organ. Gouramis were reared for up to 90 d in normoxia or hypoxia, and morphological and physiological development was observed. Hypoxic larvae had increased lamellar and labyrinth organ surface areas. Bradycardia and increased gill ventilation rates were observed when larvae from either rearing group were briefly exposed to hypoxia. Hypoxic larvae also showed a reduced heart rate and gill ventilation rate in the absence of a hypoxic stimulus, possibly indicative of a more comprehensive, long-term respiratory plasticity. The similarity of routine oxygen consumption between rearing groups suggests that metabolic demand did not change for hypoxic larvae, but that they were more efficient at oxygen acquisition. This is further supported by increased resistance time of hypoxic gouramis to extreme hypoxia. The onset of air breathing was between 20 and 25 d post-fertilization, and was not affected by either rearing or exposure environment. It may be that this behavior is associated with the inability of smaller larvae to successfully overcome water surface tension, rather than with the necessity of aerial respiration at this stage. Hypoxia is commonly experienced by most air breathing fishes, and studies of hypoxia-induced developmental effects may provide critical insights into the evolution of air breathing. The studies presented here provide novel data on the plasticity of cardio-respiratory development of an air breathing fish reared in hypoxia, and can serve as a solid foundation for future studies.