There is an emerging concept that acquired genetic instability in cancer cells can arise from the dysregulation of critical DNA repair pathways due to cell stresses such as inflammation and hypoxia. Here we report that hypoxia specifically down-regulates the expression of RAD51, a key mediator of homologous recombination in mammalian cells. Decreased levels of Rad51 were observed in multiple cancer cell types during hypoxic exposure and were not associated with the cell cycle profile or with expression of hypoxia-inducible factor. Analyses of RAD51 gene promoter activity, as well as mRNA and protein stability, indicate that the hypoxia-mediated regulation of this gene occurs via transcriptional repression. Decreased expression of Rad51 was also observed to persist in posthypoxic cells for as long as 48 h following reoxygenation. Correspondingly, we found reduced levels of homologous recombination in both hypoxic and posthypoxic cells, suggesting that the hypoxia-associated reduction in Rad51 expression has functional consequences for DNA repair. In addition, hypoxia-mediated down-regulation of Rad51 was confirmed in vivo via immunofluorescent image analysis of experimental tumors in mice. Based on these findings, we propose a novel mechanism of genetic instability in the tumor microenvironment mediated by hypoxia-induced suppression of the homologous recombination pathway in cancer cells. The aberrant regulation of Rad51 expression may also create heterogeneity in the DNA damage response among cells within tumors, with implications for the response to cancer therapies.