Transepithelial sodium transport via alveolar epithelial Na(+) channels (ENaC) and Na(+),K(+)-ATPase constitutes the driving force for removal of alveolar edema fluid. Alveolar hypoxia associated with pulmonary edema may impair ENaC activity and alveolar Na(+) absorption through a decrease of ENaC subunit expression at the apical membrane of alveolar epithelial cells (AEC). Here, we investigated the mechanism(s) involved in this process both in vivo in the β-Liddle mouse strain mice carrying a truncation of β-ENaC C-terminus abolishing the interaction between β-ENaC and the ubiquitin protein-ligase Nedd4-2 that targets the channel for endocytosis and degradation, and in vitro in rat AEC. Hypoxia (8% O2 for 24h) reduced amiloride-sensitive alveolar fluid clearance by 69% in wild-type mice, whereas it had no effect in homozygous mutated β-Liddle littermates. In vitro, acute exposure of AEC to hypoxia (0.5% to 3% O2 for 1-6h) rapidly decreased transepithelial Na(+) transport as assessed by equivalent short-circuit current Ieq, and the amiloride-sensitive component of Na(+) current across the apical membrane, reflecting ENaC activity. Hypoxia induced a decrease of ENaC subunit expression in the apical membrane of AEC with no change in intracellular expression, as well as a two-fold increase in α-ENaC polyubiquitination. Hypoxic inhibition of amiloride-sensitive Ieq was fully prevented by preincubation with proteasome inhibitors, MG132 and lactacystin, or with the antioxidant N-Acetyl-Cysteine. Our data strongly suggest that Nedd4-2-mediated ubiquitination of ENaC leading to endocytosis and degradation of apical Na(+) channels is a key feature of hypoxia-induced inhibition of transepithelial alveolar Na(+) transport.