The effects of oxygen partial pressure ([Formula: see text]) on development and respiration were investigated in the eggs of the Australian lungfish, Neoceratodus forsteri. At 20°C, embryonic survival and development was optimal at 15 and 20.9 kPa. Development was slowed at 5 and 10 kPa and embryos did not survive 2 kPa. At lower [Formula: see text], the rate of oxygen consumption also decreased. Embryos responded to hypoxia by hatching at an earlier age and stage of development, and hatching wet and dry gut-free masses were reduced. The role of oxygen conductance ([Formula: see text]) in gas exchange was also examined under selected environmental [Formula: see text] and temperatures. The breakdown of the vitelline membrane changed capsule geometry, allowed water to be absorbed into the perivitelline space and increased capsule [Formula: see text]. This occurred at embryonic stage 32 under all treatments and was largely independent of both [Formula: see text] and temperature (15, 20 and 25°C), demonstrating that capsule [Formula: see text] cannot adaptively respond to altered environmental conditions. The membrane breakdown increased capsule diffusive [Formula: see text] and stabilised perivitelline [Formula: see text], but reduced the convective [Formula: see text] of the perivitelline fluid, as the large perivitelline volume and inadequate convective current resulted in a [Formula: see text] gradient within the egg prior to hatch.