Oxygen plays a key role during bacterial cellulose (BC) biosynthesis by Gluconacetobacter xylinus. In this study, the Vitreoscilla hemoglobin (VHb)-encoding gene vgb, which has been widely applied to improve cell survival during hypoxia, was heterologously expressed in G. xylinus via the pBla-VHb-122 plasmid. G. xylinus and G. xylinus-vgb (+) were statically cultured under hypoxic (10 and 15% oxygen tension in the gaseous phase), atmospheric (21%), and oxygen-enriched conditions (40 and 80%) to investigate the effect of oxygen on cell growth and BC production. Irrespective of vgb expression, we found that cell density increased with oxygen tension (10-80%) during the exponential growth phase but plateaued to the same value in the stationary phase. In contrast, BC production was found to significantly increase at lower oxygen tensions. In addition, we found that BC production at oxygen tensions of 10 and 15% was 26.5 and 58.6% higher, respectively, in G. xylinus-vgb (+) than that in G. xylinus. The maximum BC yield and glucose conversion rate, of 4.3 g/L and 184.7 mg/g, respectively, were observed in G. xylinus-vgb (+) at an oxygen tension of 15%. Finally, BC characterization suggested that hypoxic conditions enhance BC's mass density, Young's modulus, and thermostability, with G. xylinus-vgb (+) synthesizing softer BC than G. xylinus under hypoxia as a result of a decreased Young's modulus. These results will facilitate the use of static culture for the production of BC.