Estimating tissue hypoxia using diffuse reflectance spectroscopy has been a tough challenge. In this work, a novel approach for extracting tissue oxygen saturation (StO 2 ) from diffuse reflectance spectra is presented. The devised method is based on the second derivative of visible light diffuse reflectance of tissue over 100 nm ranged from 500 nm to 600 nm. The theoretical predictions of the method were confirmed by estimating StO 2 from simulated diffuse reflectance generated by Monte Carlo based look-up tables. Effect of scattering and blood volume fraction on the StO 2 estimation are quantified. Validation was also tested on clinical measurements from oral mucosal tissue. The devised second derivative Diffuse reflectance spectroscopy (SD-DRS) shows a potential application for detecting tumor hypoxia, in particular, the differentiation between healthy and cancerous tissue.