Corticosteroids are potent anti-inflammatory agents, but corticosteroid insensitivity is a major barrier for the treatment of some chronic inflammatory diseases. Here, we show that hypoxia induces corticosteroid-insensitive inflammation via reduced transcription of histone deacetylase-2 (HDAC2) in lung epithelial and macrophage cells. HDAC2 mRNA and protein expression was reduced under hypoxic conditions (1% O2). Hypoxia enhanced interleukin-1β-induced interleukin-8 (CXCL8) production in A549 cells and decreased the ability of dexamethasone to suppress the CXCL8 production. Deletion or point mutation studies revealed that binding of the transcription factor hypoxia-inducible factor (HIF) 1a to a HIF response element at position 320, but not HIF-1b or HIF-2a, results in reduced polymerase II binding at the site, leading to reduced promoter activity ofHDAC2.Our results suggest that activation of HIF-1α by hypoxia decreases HDAC2 levels, resulting in amplified inflammation and corticosteroid resistance. © 2009 by The American Society for Biochemistry and Molecular Biology, Inc.