Oxygen is essential to respiration of most marine organisms. However, the oxygen concentration in seawater has been being declining, both in open oceans as well as in coastal waters, as a consequence of global warming and coastal eutrophication1. As a result, the extent of hypoxic waters is expanding2, deteriorating habitable environments for a wide range of marine biota. However, it is still unknown how marine photosynthesis will respond to such climate forcing in combination with ocean acidification. Here, we show that under experimental deoxygenation conditions, the diatom Thalassiosira weissflogi grows faster, respires less and shows faster rates of photosynthesis, with its CO2 concentrating mechanisms (CCMs) significantly up-regulated. Such stimulation of CCMs are associated with inhibition of photorespiration as consequence of Rubisco-catalyzed carboxylation and oxygenation shifting to favor CO2 fixation, that in turn enhances photosynthesis and net O2 production. Field measurements showed increased phytoplankton primary productivity at reduced oxygen concentrations, supporting our laboratory finding that deoxygenation enhances algal photosynthesis. Our results suggest that marine primary producers can benefit from ocean changes in pO2/pCO2.