In addition to controlling a switch to glycolytic metabolism and induction of erythropoiesis and angiogenesis, hypoxia promotes the undifferentiated cell state in various stem and precursor cell populations. Here, we show that the latter process requires Notch signaling. Hypoxia blocks neuronal and myogenic differentiation in a Notch-dependent manner. Hypoxia activates Notch-responsive promoters and increases expression of Notch direct downstream genes. The Notch intracellular domain interacts with HIF-1alpha, a global regulator of oxygen homeostasis, and HIF-1alpha is recruited to Notch-responsive promoters upon Notch activation under hypoxic conditions. Taken together, these data provide molecular insights into how reduced oxygen levels control the cellular differentiation status and demonstrate a role for Notch in this process.