Evolving life forms developed oxyphotosynthesis (the ability to generate oxygen via chemical reactions) about 2.7 billion years ago, and molecular oxygen started to be produced in huge quantities.
Organisms at that time were anaerobic(does not require oxygen for growth).
300 million years later, this surge in the amount of oxygen in the atmosphere started to pose problems, because oxygen was toxic to the existing organisms.
This period is called the Oxygen Catastrophe, and also known as Oxygen Crisis, Oxygen Revolution or The Great Oxidation.
However, instead of wiping out all forms of life, it enhanced existing life: life was energetically limited until oxygen was easily available. This caused a breakthrough in metabolic evolution: it greatly increased free energy supply to living organisms, hence a truly global environmental impact was felt.