OBJECTIVE Chronic hypoxia has been recognized as a key regulator in renal tubulointerstitial fibrosis, as seen in diabetic nephropathy, which is associated with the activation of hypoxia-inducible factor (HIF)-1α. We assess here the effects of the biguanide, metformin, on the expression of HIF-1α in diabetic nephropathy using renal proximal tubular cells and type 2 diabetic rats. RESEARCH DESIGN AND METHODS We explored the effects of metformin on the expression of HIF-1α using human renal proximal tubular epithelial cells (HRPTECs). Male Zucker diabetic fatty (ZDF; Gmi-fa/fa) rats were treated from 9 to 39 weeks with metformin (250 mg ⋅ kg(-1) ⋅ day(-1)) or insulin. RESULTS Metformin inhibited hypoxia-induced HIF-1α accumulation and the expression of HIF-1-targeted genes in HRPTECs. Although metformin activated the downstream pathways of AMP-activated protein kinase (AMPK), neither the AMPK activator, AICAR, nor the mTOR inhibitor, rapamycin, suppressed hypoxia-induced HIF-1α expression. In addition, knockdown of AMPK-α did not abolish the inhibitory effects of metformin on HIF-1α expression. The proteasome inhibitor, MG-132, completely eradicated the suppression of hypoxia-induced HIF-1α accumulation by metformin. The inhibitors of mitochondrial respiration similarly suppressed hypoxia-induced HIF-1α expression. Metformin significantly decreased ATP production and oxygen consumption rates, which subsequently led to increased cellular oxygen tension. Finally, metformin, but not insulin, attenuated tubular HIF-1α expression and pimonidazole staining and ameliorated tubular injury in ZDF rats. CONCLUSIONS Our data suggest that hypoxia-induced HIF-1α accumulation in diabetic nephropathy could be suppressed by the antidiabetes drug, metformin, through the repression of oxygen consumption.