Diel-cycling hypoxia is widespread in shallow portions of estuaries and lagoons, especially in systems with high nutrient loads resulting from human activities. Far less is known about the effects of this form of hypoxia than deeper-water seasonal or persistent low dissolved oxygen. We examined field patterns of diel-cycling hypoxia and used field and laboratory experiments to test its effects on acquisition and progression of Perkinsus marinus infections in the eastern oyster, Crassostrea virginica, as well as on oyster growth and filtration. P. marinus infections cause the disease known as Dermo, have been responsible for declines in oyster populations, and have limited success of oyster restoration efforts. The severity of diel-cycling hypoxia varied among shallow monitored sites in Chesapeake Bay, and average daily minimum dissolved oxygen was positively correlated with average daily minimum pH. In both field and laboratory experiments, diel-cycling hypoxia increased acquisition and progression of infections, with stronger results found for younger (1-year-old) than older (2-3-year-old) oysters, and more pronounced effects on both infections and growth found in the field than in the laboratory. Filtration by oysters was reduced during brief periods of exposure to severe hypoxia. This should have reduced exposure to waterborne P. marinus, and contributed to the negative relationship found between hypoxia frequency and oyster growth. Negative effects of hypoxia on the host immune response is, therefore, the likely mechanism leading to elevated infections in oysters exposed to hypoxia relative to control treatments. Because there is considerable spatial variation in the frequency and severity of hypoxia, diel-cycling hypoxia may contribute to landscape-level spatial variation in disease dynamics within and among estuarine systems.