Major ecological transitions such as the invasion of land by aquatic vertebrates may be facilitated by positive feedback between habitat choice and phenotypic plasticity. We used the amphibious fish Kryptolebias marmoratus to test the hypothesis that aquatic hypoxia, emergence behaviour and respiratory plasticity create this type of positive feedback loop that causes fish to spend increasing amounts of time on land. Terrestrially acclimated fish were more sensitive to aquatic hypoxia (emergence at higher PO2) and were less hypoxia tolerant (shorter time to loss of equilibrium) relative to water-acclimated fish, which are necessary conditions for positive feedback. Next, we tested the prediction that exposure to aquatic hypoxia causes fish to emerge frequently, reduce gill surface area, and become less hypoxia tolerant. Indeed, fish exposed to severe aquatic hypoxia spent almost 50% of the time out of water and coverage of the gill lamellae by an inter-lamellar cell mass almost doubled. Fish exposed to aquatic hypoxia that could emerge from water were also more sensitive to subsequent acute aquatic hypoxia and were less hypoxia tolerant than normoxia-exposed controls. These results are opposite those of fish that cannot escape from aquatic hypoxia and presumably arise owing to plastic changes that occur during air exposure. Together, these results indicate that emergence behaviour begets further emergence behaviour, driven by gill remodelling which reduces aquatic respiratory function. This type of positive feedback may explain how amphibious behaviour has repeatedly evolved in fishes that occupy hypoxic aquatic habitats despite the associated challenges of life on land.