Turtle embryos pause development before oviposition in a process known as preovipositional arrest. Embryonic development arrests due to hypoxia (low oxygen) in the maternal oviducts and resumes only after exposure to normoxia when eggs are laid. Recently, several studies have hypothesized that the prolonged periods of preovipositional arrest may have a detrimental effect on embryo survival and development after eggs are laid. We tested this hypothesis by comparing embryo survival (determined by white spot formation and hatching success) and hatchling fitness (measured by self-righting, crawling, and swimming ability) of flatback sea turtle(Natator depressus)eggs following incubation in hypoxic (~1%) and normoxic (~21%) treatments for 5 d immediately following oviposition. We also measured embryo survival and hatchling fitness when eggs were incubated in hyperoxic conditions (42% oxygen), to determine whether hyperoxia could improve developmental outcome or whether some consequence of oxidative stress might manifest. Eggs incubated in hypoxia remained arrested during the 5-d treatment, and 97.5% of the eggs successfully recommenced development after exposure to normoxia when the treatment finished. At treatment commencement, 100% and 97.5% of eggs in the hyperoxic and normoxic treatments, respectively, began developing. Although hatching success was significantly lower following hypoxia (15%) compared to normoxia (80%) and hyperoxia (85%), hatchings from the hypoxic treatment were larger (carapace length and width and plastron length) than normoxic hatchlings. Similarly, hypoxic hatchings also swam significantly faster than hyperoxic hatchlings. Considering larger hatchlings may have a greater chance of survival, the production of larger hatchings may offset the high cost (lower hatching success) when preovipositional arrest is prolonged. Hyperoxia does not appear to have deleterious consequences for development.