Prenatal hypoxia is a common perturbation to arise during pregnancy, and can lead to adverse health outcomes in later life. The long‐lasting impact of prenatal hypoxia on postnatal kidney development and maturation of the renal tubules, particularly the collecting duct system, is relatively unknown. In the present study, we used a model of moderate chronic maternal hypoxia throughout late gestation (12% O2 exposure from embryonic day 14.5 until birth). Histological analyses revealed marked changes in the tubular architecture of male hypoxia‐exposed neonates as early as postnatal day 7, with disrupted medullary development and altered expression of Ctnnb1 and Crabp2 (encoding a retinoic acid binding protein). Kidneys of the RARElacZ line offspring exposed to hypoxia showed reduced β‐galactosidase activity, indicating reduced retinoic acid‐directed transcriptional activation. Wild‐type male mice exposed to hypoxia had an early decline in urine concentrating capacity, evident at 4 months of age. At 12 months of age, hypoxia‐exposed male mice displayed a compromised response to a water deprivation challenge, which was was correlated with an altered cellular composition of the collecting duct and diminished expression of aquaporin 2. There were no differences in the tubular structures or urine concentrating capacity between the control and hypoxia‐exposed female offspring at any age. The findings of the present study suggest that prenatal hypoxia selectively disrupts collecting duct patterning through altered Wnt/β‐catenin and retinoic acid signalling and this results in impaired function in male mouse offspring in later life.