Cells adapt to hypoxia by a cellular response, where hypoxia-inducible factor 1α (HIF-1α) becomes stabilized and directly activates transcription of downstream genes. In addition to this “canonical” response, certain aspects of the pathway require integration with Notch signaling, i.e., HIF-1α can interact with the Notch intracellular domain (ICD) to augment the Notch downstream response. In this work, we demonstrate an additional level of complexity in this cross-talk: factor-inhibiting HIF-1 (FIH-1) regulates not only HIF activity, but also the Notch signaling output and, in addition, plays a role in how Notch signaling modulates the hypoxic response. We show that FIH-1 hydroxylates Notch ICD at two residues (N1945 and N2012) that are critical for the function of Notch ICD as a transactivator within cells and during neurogenesis and myogenesis in vivo. FIH-1 negatively regulates Notch activity and accelerates myogenic differentiation. In its modulation of the hypoxic response, Notch ICD enhances recruitment of HIF-1α to its target promoters and derepresses HIF-1α function. Addition of FIH-1, which has a higher affinity for Notch ICD than for HIF-1α, abrogates the derepression, suggesting that Notch ICD sequesters FIH-1 away from HIF-1α. In conclusion, the data reveal posttranslational modification of the activated form of the Notch receptor and an intricate mode of cross-coupling between the Notch and hypoxia signaling pathways. ; Xiaofeng Zheng, Sarah Linke, José M. Dias, Xiaowei Zheng, Katarina Gradin, Tristan P. Wallis, Brett R. Hamilton, Maria Gustafsson, Jorge L. Ruas, Sarah Wilkins, Rebecca L. Bilton, Kerstin Brismar, Murray L. Whitelaw, Teresa Pereira, Jeffrey J. Gorman, Johan Ericson, Daniel J. Peet, Urban Lendahl, and Lorenz Poellinger ; Copyright © 2008 by The National Academy of Sciences of the USA