Oxygenation levels are a determinative factor in T cell function. Here, we describe how oxygen tensions sensed by mouse and human T cells at the moment of activation act to persistently modulate both differentiation and function. We found that in a protocol of CAR-T cell generation, 24 hr of low oxygen levels during initial CD8+ T cell priming is sufficient to enhance antitumour cytotoxicity in a preclinical model. This is the case even when CAR-T cells are subsequently cultured under high oxygen tensions prior to adoptive transfer. Increased hypoxia-inducible transcription factor (HIF) expression was able to alter T cell fate in a similar manner to exposure to low oxygen tensions; however, only a controlled or temporary increase in HIF signalling was able to consistently improve cytotoxic function of T cells. These data show that oxygenation levels during and immediately after T cell activation play an essential role in regulating T cell function.