Tissue and organ injury results in alterations of the local microenvironment, including the reduction in oxygen concentration and degradation of the extracellular matrix (ECM). The response of perivascular stem cells to these microenvironment changes are of particular interest because of their wide distribution throughout the body and their potential involvement in tissue and organ response to injury. The chemotactic, mitogenic, and phenotypic responses of this stem cell population were evaluated in response to a combination of decreased oxygen concentration and the presence of ECM degradation products. Culture in low-oxygen conditions resulted in increased proliferation and migration of the cells and increased activation of the ERK signaling pathway and associated integrins without a change in cell surface marker phenotype. The addition of ECM degradation products were additive to these processes. Reactive oxygen species within the cells were increased in association with the mitogenic and chemotactic responses. The increased proliferation and chemotactic properties of this stem cell population without any changes in phenotype and differentiation potential has important implications for both in vitro cell expansion and for in vivo behavior of these cells at the site of injury.