Background: As a global environmental concern, hypoxia is known to be associated with many biological and physiological impairments in aquatic ecosystems. Previous studies have mainly focused on the effect of hypoxia in adult animals. However, the effect of hypoxia and the underlying mechanism of how hypoxia affects embryonic development of aquatic animals remain unclear. Methodology/Principal Findings: In the current study, the effect of hypoxia on primordial germ cell (PGC) migration in zebrafish embryos was investigated. Hypoxic embryos showed PGC migration defect as indicated by the presence of mis-migrated ectopic PGCs. Insulin-like growth factor (IGF) signaling is required for embryonic germ line development. Using real-time PCR, we found that the mRNA expression levels of insulin-like growth factor binding protein (IGFBP-1), an inhibitor of IGF bioactivity, were significantly increased in hypoxic embryos. Morpholino knockdown of IGFBP-1 rescued the PGC migration defect phenotype in hypoxic embryos, suggesting the role of IGFBP-1 in inducing PGC mis-migration. Conclusions/Significance: This study provides novel evidence that hypoxia disrupts PGC migration during embryonic development in fish. IGF signaling is shown to be one of the possible mechanisms for the causal link between hypoxia and PGC migration. We propose that hypoxia causes PGC migration defect by inhibiting IGF signaling through the induction of IGFBP-1. Copyright © 2011 Lo et al.