Tumor hypoxia has been reported to cause a functional loss in DNA mismatch repair (MMR) system as a result of downregulation of MMR genes, although the precise molecular mechanisms remain unclear. In this study, we focused on the downregulation of a key MMR gene, MLH1, and demonstrated that hypoxia-inducible transcription repressors, differentiated embryo chondrocytes (DEC1 and 2), participated in its transcriptional regulation via their bindings to E-box-like motif(s) in MLH1 promoter region. In all cancer cell lines examined, hypoxia increased expression of DEC1 and 2, known as hypoxia-inducible genes, but decreased MLH1 expression in an exposure time-dependent manner at both the mRNA and protein levels. Co-transfection reporter assay revealed that DEC1 and, to greater extent, DEC2 as well as hypoxia-repressed MLH1 promoter activity. We further found that the action was remarkably inhibited by trichostatin A, and identified a possible DEC-response element in the MLH1 promoter. In vitro electrophoretic gel mobility shift and chromatin immunoprecipitation assays demonstrated that DEC1 or 2 directly bounds to the suggested element, and transient transfection assay revealed that overexpression of DEC2 repressed endogenous MLH1 expression in the cells. Hypoxia-induced DEC may impair MMR function through repression of MLH1 expression, possibly via the histone deacethylase-mediated mechanism in cancer cells.