Fast-growing hairy root cultures of Hyoscyamus muticus induced by Agrobacterium rhizogenes offer a potential production system for tropane alkaloids. Oxygen deficiency has been shown to limit growth and biomass accumulation of hairy roots, whereas little experimental data is available on the effect of oxygen on alkaloid production. We have investigated the effect of Vitreoscilla hemoglobin (VHb) expression and cultivation conditions on the complete alkaloid profile of H. muticus hairy roots in shake flasks and in a laboratory scale bioreactor. We optimized the growth medium composition and studied the effects of sucrose, ammonium, nitrate, and phosphate on growth and alkaloid production. Maximum biomass accumulation was achieved with the highest and maximum hyoscyamine content with the lowest sucrose concentration. The optimum nitrate concentration for growth was higher for the VHb line than the control. Neither VHb expression nor aeration improved the hyoscyamine content significantly, thus suggesting that hyoscyamine biosynthesis is not limited by oxygen availability. Interestingly, the effect of VHb expression on the alkaloid profile was slightly different from that of aeration. VHb expression did not affect the concentrations of cuscohygrine, which was increased by aeration. Therefore, the effect of VHb is probably not related only to its ability to increase the intracellular effective oxygen concentration.