Oxygen concentration should be carefully regulated in all living tissues, beginning at the early embryonic stages. Unbalances in oxygen regulation can lead to cell death and disease. However, to date, few studies have investigated the consequences of variations in oxygen levels for fetal-like cells. Therefore, in the present work, human neural progenitor cells (NPCs) derived from pluripotent stem cells grown in 3% oxygen (v/v) were compared with NPCs cultured in 21% (v/v) oxygen. Low oxygen concentrations altered the mitochondrial content and oxidative functions of the cells, which led to improved ATP production, while reducing generation of reactive oxygen species (ROS). NPCs cultured in both conditions showed no differences in proliferation and glucose metabolism. Furthermore, antioxidant enzymatic activity was not altered in NPCs cultured in 3% oxygen under normal conditions, however, when exposed to external agents known to induce oxidative stress, greater susceptibility to DNA damage was observed. Our findings indicate that the management of oxygen levels should be considered for in vitro models of neuronal development and drug screening.