This study compared the effects of inspiring either a hyperoxic (60% O2) or normoxic gas (21% O2) while cycling at 70% peak O2 uptake on 1) the ATP derived from substrate phosphorylation during the initial minute of exercise, as estimated from phosphocreatine degradation and lactate accumulation, and 2) the reliance on carbohydrate utilization and oxidation during steady-state cycling, as estimated from net muscle glycogen use and the activity of pyruvate dehydrogenase (PDH) in the active form (PDHa), respectively. We hypothesized that 60% O2 would decrease substrate phosphorylation at the onset of exercise and that it would not affect steady-state exercise PDH activity, and therefore muscle carbohydrate oxidation would be unaltered. Ten active male subjects cycled for 15 min on two occasions while inspiring 21% or 60% O2, balance N2. Blood was obtained throughout and skeletal muscle biopsies were sampled at rest and 1 and 15 min of exercise in each trial. The ATP derived from substrate-level phosphorylation during the initial minute of exercise was unaffected by hyperoxia (21%: 52.2 ± 11.1; 60%: 54.0 ± 9.5 mmol ATP/kg dry wt). Net glycogen breakdown during 15 min of cycling was reduced during the 60% O2 trial vs. 21% O2 (192.7 ± 25.3 vs. 138.6 ± 16.8 mmol glycosyl units/kg dry wt). Hyperoxia had no effect on PDHa, because it was similar to the 21% O2 trial at rest and during exercise (21%: 2.20 ± 0.26; 60%: 2.25 ± 0.30 mmol·kg wet wt−1·min−1). Blood lactate was lower (6.4 ± 1.0 vs. 8.9 ± 1.0 mM) at 15 min of exercise and net muscle lactate accumulation was reduced from 1 to 15 min of exercise in the 60% O2 trial compared with 21% (8.6 ± 5.1 vs. 27.3 ± 5.8 mmol/kg dry wt). We concluded that O2 availability did not limit oxidative phosphorylation in the initial minute of the normoxic trial, because substrate phosphorylation was unaffected by hyperoxia. Muscle glycogenolysis was reduced by hyperoxia during steady-state exercise, but carbohydrate oxidation (PDHa) was unaffected. This closer match between pyruvate production and oxidation during hyperoxia resulted in decreased muscle and blood lactate accumulation. The mechanism responsible for the decreased muscle glycogenolysis during hyperoxia in the present study is not clear.