The Humboldt (or jumbo) squid, Dosidicus gigas, is an active predator endemic to the Eastern Pacific that undergoes diel vertical migrations into a pronounced oxygen minimum layer (OML). Here, we investigate the physiological mechanisms that facilitate these migrations and assess the associated costs and benefits. Exposure to hypoxic conditions equivalent to those found in the OML (∼10 μM O2 at 10 °C) led to a significant reduction in the squid’s routine metabolic rate (RMR), from 8.9 to 1.6 μmol O2 g−1 h−1 (p < 0.05), and a concomitant increase in mantle muscle octopine levels (from 0.50 to 5.24 μmol g−1 tissue, p < 0.05). Enhanced glycolitic ATP production accounted for only 7.0% and 2.8% at 10 °C and 20 °C, respectively, of the energy deficit that resulted from the decline in aerobic respiration. The observed metabolic suppression presumably extends survival time in the OML by conserving the finite stores of fermentable substrate and avoiding the accumulation of the deleterious anaerobic end products in the tissues. RMR increased significantly with temperature (p < 0.05), from 8.9 (at 10 °C) to 49.85 μmol O2 g−1 h−1 (at 25 °C) which yielded a Q10 of 2.0 between 10 and 20 °C and 7.9 between 20 and 25 °C (p < 0.05). These results suggest that 25 °C, although within the normal surface temperature range in the Gulf of California, is outside this species’ normal temperature range. By following the scattering layer into oxygen-enriched shallow water at night, D. gigas may repay any oxygen debt accumulated during the daytime. The dive to deeper water may minimize exposure to stressful surface temperatures when most prey have migrated to depth during the daytime. The physiological and ecological strategies demonstrated here may have facilitated the recent range expansion of this species into northern waters where expanding hypoxic zones prohibit competing top predators.