To identify new dimerization partners for the aromatic hydrocarbon receptor nuclear translocator (Arnt), we used its N-terminal region (amino acids 1-470) as a target in a two-hybrid screening procedure, and we cloned the murine form of hypoxia-inducible factor 1alpha (HIF1alpha). Sequence comparisons reveal substantial identity between mouse and human HIF1alpha. Hypoxia induces a 10-fold accumulation of phosphoglycerate kinase 1 mRNA in wild type mouse hepatoma (Hepa 1c1c7) cells; the induction mechanism is Arnt dependent because induction does not occur in Arnt-defective cells. Furthermore, induction of phosphoglycerate kinase 1 mRNA requires Arnt's N-terminal region, which mediates DNA binding and heterodimerization; in contrast, induction does not require Arnt's C-terminal region, which mediates transactivation. We also show that a GAL4-HIF1alpha fusion protein transactivates a GAL4-dependent gene in the absence of Arnt, that HIF1alpha's transactivation capability is inducible by hypoxia, and that both hypoxia responsiveness and transactivation capability reside within the C-terminal 83 amino acids of HIF1alpha. Our findings generate new insights into the mechanism by which Arnt and HIF1alpha induce transcription in response to hypoxia.