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The application of physiological oxygen (physoxia) concentrations is becoming increasingly commonplace within a mammalian stem cell culture. Human mesenchymal stem cells (hMSCs) attract widespread interest for clinical application due to their unique immunomodulatory, multi-lineage potential, and regenerative capacities. Descriptions of the impact of physoxia on global DNA methylation patterns in hMSCs and the activity of enzymatic machinery responsible for its regulation remain limited. Human bone marrow-derived mesenchymal stem cells (BM-hMSCs, passage 1) isolated in reduced oxygen conditions displayed an upregulation of SOX2 in reduced oxygen conditions vs. air oxygen (21% O2, AO), while no change was noted for either OCT-4 or NANOG. DNA methylation marks 5-methylcytosine (5mC) and 5-hydroxymethylcytosine (5hmC) showed decreases in 2% O2 environment (workstation) (2% WKS). DNMT3B (DNA methyltransferase 3B) and TET1 (Ten-eleven translocation enzyme 1) displayed reduced transcription in physoxia. Consistent with transcriptional downregulation, we noted increased promoter methylation levels of DNMT3B in 2% WKS accompanied by reduced DNMT3B and TET1 protein expression. Finally, a decrease in HIF1A (Hypoxia-inducible factor 1A) gene expression in 2% WKS environment correlated with protein levels, while HIF2A was significantly higher in physoxia correlated with protein expression levels vs. AO. Together, these data have demonstrated, for the first time, that global 5mC, 5hmC, and DNMT3B are oxygen-sensitive in hMSCs. Further insights into the appropriate epigenetic regulation within hMSCs may enable increased safety and efficacy development within the therapeutic ambitions.