Loss of vision and blindness in human patients is often caused by the degeneration of neuronal cells in the retina. In mouse models, photoreceptors can be protected from death by hypoxic preconditioning. Preconditioning in low oxygen stabilizes and activates hypoxia inducible transcription factors (HIFs), which play a major role in the hypoxic response of tissues including the retina. We show that a tissue-specific knockdown of von Hippel-Lindau protein (VHL) activated HIF transcription factors in normoxic conditions in the retina. Sustained activation of HIF1 and HIF2 was accompanied by persisting embryonic vasculatures in the posterior eye and the iris. Embryonic vessels persisted into adulthood and led to a severely abnormal mature vessel system with vessels penetrating the photoreceptor layer in adult mice. The sustained hypoxia-like response also activated the leukemia inhibitory factor (LIF)-controlled endogenous molecular cell survival pathway. However, this was not sufficient to protect the retina against massive cell death in all retinal layers of adult mice. Caspases 1, 3 and 8 were upregulated during the degeneration as were several VHL target genes connected to the extracellular matrix. Misregulation of these genes may influence retinal structure and may therefore facilitate growth of vessels into the photoreceptor layer. Thus, an early and sustained activation of a hypoxia-like response in retinal cells leads to abnormal vasculature and severe retinal degeneration in the adult mouse retina.