The O₂ sensitivity of carotid chemoreceptor type I cells is low just after birth and increases with postnatal age. Chronic hypoxia during postnatal maturation blunts ventilatory and carotid chemoreceptor neural responses to hypoxia, but the mechanism remains unknown. We tested the hypothesis that chronic hypoxia from birth impairs the postnatal increase in type I cell O₂ sensitivity by comparing intracellular Ca²⁺ concentration ([Ca²⁺]_i) responses to graded hypoxia in type I cell clusters from rats born and reared in room air or 12% O₂. [Ca²⁺]_i levels at 0, 1, 5, and 21% O₂, as well as with 40 mM K⁺, were measured at 3, 11, and 18 days of age with use of fura 2 in freshly isolated cells. The [Ca²⁺]_i response to elevated CO₂/low pH was measured at 11 days. Chronic hypoxia from birth abolished the normal developmental increase in the type I cell [Ca²⁺]_i response to hypoxia. Effects of chronic hypoxia on development of [Ca²⁺]_i responses to elevated K⁺ were small, and [Ca²⁺]_i responses to CO₂ remained unaffected. Impairment of type I cell maturation was partially reversible on return to normoxic conditions. These results indicate that chronic hypoxia severely impairs the postnatal development of carotid chemoreceptor O₂ sensitivity at the cellular level and leaves responses to other stimuli largely intact.