Animals are thought to die at high temperatures because proteins and cell membranes lose their structural integrity. Alternatively, a newer hypothesis (the oxygen and capacity limitation of thermal tolerance, or OCLTT) states that death occurs because oxygen supply becomes limited at high temperatures. Consequently, animals exposed to hypoxia are more sensitive to heating than those exposed to normoxia or hyperoxia. We hypothesized that animals raised in hypoxia would acclimate to the low oxygen supply, thereby making them less sensitive to heating. Such acclimation would be expressed as greater heat tolerance and better flight performance in individuals raised at lower oxygen concentrations. We raised flies (Drosophila melanogaster) from eggs to adults under oxygen concentrations ranging from 10% to 31% and measured two aspects of thermal tolerance: 1) the time required for flies to lose motor function at 39.5°C at normoxia (21%), referred to as knock-down time, and 2) flight performance at 37°, 39°, or 41°C and 12%, 21%, or 31% oxygen. Contrary to our prediction, flies from all treatments had the same knock-down time. However, flight performance at hypoxia was greatest for flies raised in hypoxia, but flight performance at normoxia and hyperoxia was greatest for flies raised at hyperoxia. Thus, flight performance acclimated to oxygen supply during development, but heat tolerance did not. Our data does not support the OCLTT hypothesis, but instead supports the beneficial acclimation hypothesis, which proposes that acclimation improves the function of an organism during environmental change.