Hydroxylase inhibitors stabilize hypoxia-inducible factor-1 (HIF-1), which has barrier-protective activity in the gut. Because the inflammatory cytokine TNF-α contributes to inflammatory bowel disease in part by compromising intestinal epithelial barrier integrity, hydroxylase inhibition may have beneficial effects in TNF-α–induced intestinal epithelial damage. The hydroxylase inhibitor dimethyloxalylglycin (DMOG) was tested in a murine model of TNF-α–driven chronic terminal ileitis. DMOG-treated mice experienced clinical benefit and showed clear attenuation of chronic intestinal inflammation compared with that of vehicle-treated littermates. Additional in vivo and in vitro experiments revealed that DMOG rapidly restored terminal ileal barrier function, at least in part through prevention of TNF-α–induced intestinal epithelial cell apoptosis. Subsequent transcriptional studies indicated that DMOG repressed Fas-associated death domain protein (FADD), a critical adaptor molecule in TNFR-1-mediated apoptosis, in an HIF-1α–dependent manner. Loss of this FADD repression by HIF-1α-targeting small interfering RNA significantly diminished the antiapoptotic action of DMOG. Additional molecular studies led to the discovery of a previously unappreciated HIF-1 binding site in the FADD promoter, which controls repression of FADD during hypoxia. As such, the results reported in this study allowed the identification of an innate mechanism that protects intestinal epithelial cells during (inflammatory) hypoxia, by direct modulation of death receptor signaling. Hydroxylase inhibition could represent a promising alternative treatment strategy for hypoxic inflammatory diseases, including inflammatory bowel disease.