In resting skeletal muscle, acute systemic hypoxia evokes vasodilatation, while vasoconstriction evoked by increased muscle sympathetic nerve activity is blunted, referred to herein as hypoxic sympatholysis. This review considers the contributions of adenosine, prostaglandin I2, nitric oxide, ATP and endothelium-derived hyperpolarizing factors to the muscle vasodilatation, with particular attention being given to the release and actions of adenosine, which plays a dominant role. It is argued that the dilator substances are released in proportion to the local level of hypoxia, notably, allowing terminal arterioles to regulate O2 distribution through the capillaries. Correspondingly, hypoxic sympatholysis can be attributed to the ability of local hypoxia to blunt vasoconstriction evoked by noradrenaline acting on α1- and α2-adrenoceptors. The synergistic actions of ATP as cotransmitter may be depressed in parallel, but the actions of neuropeptide Y persist. Consideration is also given to the changes induced by chronic hypoxia in adult life and to the consequences in adult life of fetal programming induced by chronic hypoxia during pregnancy. In both conditions, dilator responsiveness to acute hypoxia is maintained, but the action or release of adenosine is altered in ways that are not yet understood. Both conditions are also accompanied by blunted sympathetically evoked vasoconstriction, tonically raised muscle sympathetic nerve activity, and increased muscular vascular tone and arterial blood pressure. With hypoxia-induced fetal programming, arterial pressure is increased in young adults and increases with age. The mechanisms underlying these changes are discussed, and it is argued that chronic hypoxia in adult life or in utero may facilitate development of hypertension.