Retrotransposons are mobile genetic elements that proliferate through an RNA intermediate. Transposons do not encode transcription factors and thus rely on host factors for mRNA expression and survival. Despite information regarding conditions under which elements are upregulated, much remains to be learned about the regulatory mechanisms or factors controlling retrotransposon expression. Here, we report that low oxygen activates the fission yeast Tf2 family of retrotransposons. Sre1, the yeast ortholog of the mammalian membrane-bound transcription factor sterol regulatory element binding protein (SREBP), directly induces the expression and mobilization of Tf2 retrotransposons under low oxygen. Sre1 binds to DNA sequences in the Tf2 long terminal repeat that functions as an oxygen-dependent promoter. We find that Tf2 solo long terminal repeats throughout the genome direct oxygen-dependent expression of adjacent coding and noncoding sequences, providing a potential mechanism for the generation of oxygen-dependent gene expression.