In chronic renal failure (CRF), renal impairment correlates with tubulointerstitial fibrosis characterized by inflammation, interstitial expansion with accumulation of extracellular matrix (ECM), tubular atrophy and vascular obliteration. Tubulointerstitial injury subsequent to glomerular sclerosis may be induced by proteinuria, leakage of glomerular filtrate or injury to the post-glomerular peritubular capillaries (hypoxia). In vivo data in animal models suggest that CRF is associated with hypoxia, with the decline in renal Po2 preceding ECM accumulation. Chronic renal failure is characterized by loss of microvascular profiles but, in the absence of microvascular obliteration, hypoxia can occur by a variety of complementary mechanisms, including anaemia, decreased capillary flow, increased vasoconstriction, increased metabolic demand and increased diffusion distances due to ECM deposition. Hypoxia regulates a wide array of genes, including many fibrogenic factors. Hypoxia-inducible factors (HIF) are the major, but not the sole, transcriptional regulators in the hypoxic response. In CRF, hypoxia may play a role in the sustained inflammatory response. In vitro studies in tubulointerstitial cells suggest that hypoxia can induce profibrogenic changes in proximal tubular epithelial cells and interstitial fibroblasts consistent with changes observed in CRF in vivo. The effect of hypoxia on renal microvascular cells warrants investigation. Hypoxia may play a role in the recruitment, retention and differentiation of circulating progenitor cells to the kidney contributing to the disease process and may also affect intrinsic stem cell populations. Chronic hypoxia in CRF fails to induce a sustained angiogenic response. Therapeutic manipulation of the hypoxic response may be of benefit in slowing progression of CRF. Potential therapies include correction of anaemia, inhibition of the renin-angiotensin system, administration of exogenous pro-angiogenic factors to protect the microvasculature, activation of HIF and hypoxia-mediated targeting of engineered progenitor cells.