The inner- to mid-continental shelf of the northern Gulf of Mexico from the Mississippi River delta to the upper Texas coast is the largest zone of hypoxic bottom waters in the western Atlantic Ocean coastal zone. Hypoxia was first documented in the northern Gulf of Mexico in 1972. It is caused primarily by algal production stimulated by the excess nutrients delivered to Gulf waters from the Mississippi—Atchafalaya River drainage basin, in combination with the stratification of Gulf waters. The Mississippi river and Gulf oceanography create a strongly stratified system each year and if storms don't mix the waters, the bottom is isolated from aeration until fall. Other factors contributing to the Gulf of Mexico hypoxia are changes in landscape use and coastal wetland loss.

The mid-summer area of bottom hypoxia in 1985-1992 averaged 8000-9000km2 and increased up to 16 000 – 20 000km2 in 1993-2000. Spatial and temporal variety in the distribution of hypoxia are at least partially related to the amplitude and phasing of the river discharges and their nutrient flux. Mississippi river nutrient concentrations and loadings to the continental shelf have accelerated dramatically since the 1950s. Hypoxia occurs not only in the bottom near the sediments but well up into the water column.

The fishery resources of the Gulf are among the most valuable in the United States. Motile fish and crustaceans are generally absent from the hypoxic bottoms and other invertebrates die or show stress behavior in anoxic areas. Studies have shown that areas with persistent and severe hypoxia have more reduced abundance, species richness and biomass than the areas with intermittent and less severe hypoxia. Effects on hypoxia on fish include direct mortality, altered migration, reduction in suitable habitats, increased susceptibility to predation (including fishing by humans), changes in food resources and disruption of life cycles.

It has been suggested that the large hypoxic regions are not likely to have occurred prior to the 1970s, and that the size of those regions grew to a maximum in the 1980s and has then fluctuated between the mid-1980s and present. An action plan for reducing, mitigating and controlling hypoxia in the Gulf include a goal of reducing the average area of the hypoxic zone to below 5000km2 by 2015.

The BP oil spill in 2010 may affect dissolved oxygen content in numerous ways, e.g. create more deep water dead zones and deplete oxygen in water, but the Gulf of Mexico reaction to the oil spill is still uncertain.