Hypoxia occurs over large areas in aquatic systems worldwide, and there is growing concern that hypoxia may affect aquatic animals, leading to population decline and changes in community by elimination of sensitive species. For the first time, we report that sublethal levels of hypoxia can significantly increase (+77.4%) malformation in fish embryonic development. Disruption of apoptotic pattern was clearly evident at 24 h post-fertilization, which may be a major cause of malformation. Furthermore, embryonic development was delayed, and balance of sex hormones (testosterone and estradiol) was disturbed during embryonic stages, implicating that subsequent sexual development may also be affected. Overall, our results imply that hypoxia may have a teratogenic effect on fish and delay fish embryonic development, which may subsequently impair species fitness leading to natural population decline.