Hypoxia is a feature of the microenvironment of a growing tumor. The transcription factor NFκB is activated in hypoxia, an event that has significant implications for tumor progression. Here, we demonstrate that hypoxia activates NFκB through a pathway involving activation of IκB kinase-β (IKKβ) leading to phosphorylation-dependent degradation of IκBα and liberation of NFκB. Furthermore, through increasing the pool and/or activation potential of IKKβ, hypoxia amplifies cellular sensitivity to stimulation with TNFα. Within its activation loop, IKKβ contains an evolutionarily conserved LxxLAP consensus motif for hydroxylation by prolyl hydroxylases (PHDs). Mimicking hypoxia by treatment of cells with siRNA against PHD-1 or PHD-2 or the pan-prolyl hydroxylase inhibitor DMOG results in NFκB activation. Conversely, overexpression of PHD-1 decreases cytokine-stimulated NFκB reporter activity, further suggesting a repressive role for PHD-1 in controlling the activity of NFκB. Hypoxia increases both the expression and activity of IKKβ, and site-directed mutagenesis of the proline residue (P191A) of the putative IKKβ hydroxylation site results in a loss of hypoxic inducibility. Thus, we hypothesize that hypoxia releases repression of NFκB activity through decreased PHD-dependent hydroxylation of IKKβ, an event that may contribute to tumor development and progression through amplification of tumorigenic signaling pathways.