In some myopathies, hypoxia can be the result of pathologic effects like muscle necrosis and abnormal blood flow. At the molecular level, the consequence of hypoxic conditions is not yet fully understood. Under stress conditions, many housekeeping gene mRNAs are translationally silenced, while translation of other mRNAs increases. Alterations to the pool of mRNAs available for translation lead to the formation of so-called stress granules containing both mRNAs and proteins. Stress granule formation and dynamics have been investigated using cells in culture, but have not yet been examined in vivo. In Drosophila embryonic muscles, we found that hypoxia induces the formation of sarcoplasmic granules containing the established stress granule markers RIN and dFMR1. Upon restoration of normoxia, the observed granules were decreased in size, indicating that their formation might be reversible. Employing photobleaching approaches, we found that a cytoplasmic reporter mRNA rapidly shuttles in and out of the granules. Hence, stress granules are highly dynamic complexes and not simple temporary storage sites. Although mRNA rapidly cycles through the granules, its movement throughout the muscle is, remarkably, spatially restricted by the presence of yet undefined myofiber domains. Our results suggest that in hypoxic muscles mRNA remains highly mobile; however, its movement throughout the muscle is restricted by certain boundaries. The development of this Drosophila hypoxia model makes it possible to study the formation and dynamics of stress granules and their associated mRNAs and proteins in a living organism.