Vascular endothelial growth factor (VEGF) is a potent mitogen specific for endothelial cells. Its expression is dramatically induced by low oxygen tension in a variety of cell types, and it has been suggested to be a key mediator of hypoxia-induced angiogenesis. Although VEGF action is targeted to endothelial cells, it is generally believed that these cells do not express VEGF. In addition, the mechanisms by which hypoxia regulates VEGF production remain unclear. We report in the present study that pulmonary artery endothelial cells do not express VEGF under basal conditions; however, significant VEGF mRNA levels accumulate when these cells are exposed to hypoxia. Using a DNA fragment containing human VEGF promoter sequence, we identified a 28-bp element that is necessary and sufficient to upregulate transcription in response to hypoxia. This element can act as a hypoxia-specific enhancer when placed upstream or downstream from a heterologous promoter. The enhancer includes, in addition to an octamer homologous to the hypoxia-inducible factor-1 (HIF-1) consensus, a sequence that resides 3′ to the consensus. Although this sequence may not be involved in the binding of HIF-1, it is absolutely required for the enhancer activity and may be the binding site for certain constitutive binding proteins. The expression of VEGF by endothelial cells in response to hypoxia may provide an important mechanism by which endothelial cell permeability and proliferation is regulated in an autocrine manner.