The ability to detect changes in oxygen concentration in the environment is critical to the survival of all animals. This requires cells to express a molecular oxygen sensor that can detect shifts in oxygen levels and transmit a signal that leads to the appropriate cellular response. Recent biochemical, genetic and behavioral studies have shown that the atypical soluble guanylyl cyclases function as oxygen detectors in Drosophila larvae triggering a behavioral escape response when exposed to hypoxia. These studies also identified the sensory neurons that innervate the terminal sensory cones as likely chemosensors that mediate this response. Here I summarize the data that led to these conclusions and also highlight evidence that suggests additional, as yet unidentified, proteins are also required for detecting increases and decreases in oxygen concentrations.