Chronic lymphocytic leukemia (CLL) cells interact in the marrow with mesenchymal stromal cells (MSCs), which can enhance CLL-cells’ resistance to spontaneous or drug-induced apoptosis. Here we examined the effect of oxygen on the growth and function of MSCs from marrow aspirates of CLL patients. Cultures in ambient oxygen provided for poor recovery and growth of MSCs, which developed features of cell senescence. However, MSCs were propagated readily from the same cells when they were cultured at a physiologic oxygen concentration of 5%. Such MSCs promoted short-term CLL-cell survival in either 5% or ambient O2. However, longer-term CLL-cell survival was enhanced when the cocultures were maintained in 5% O2 versus 21% O2 because of increased MSC proliferation and production of soluble prosurvival factors, such as CXCL12. This study establishes the importance of physiologic oxygen concentration in the propagation and function of MSCs derived from marrow aspirates of CLL patients in vitro.