Hypoxia-induced cell injury has been related to multiple pathological conditions. In order to render hypoxia-sensitive cells and tissues resistant to low O2 environment, in this current study, we used Drosophila melanogaster as a model to dissect the mechanisms underlying hypoxia-tolerance. A D. melanogaster strain that lives perpetually in an extremely low-oxygen environment (4% O2, an oxygen level that is equivalent to that over about 4,000 m above Mt. Everest) was generated through laboratory selection pressure using a continuing reduction of O2 over many generations. This phenotype is genetically stable since selected flies, after several generations in room air, survive at this low O2 level. Gene expression profiling showed striking differences between tolerant and naïve flies, in larvae and adults, both quantitatively and qualitatively. Up-regulated genes in the tolerant flies included signal transduction pathways (e.g., Notch and Toll/Imd pathways), but metabolic genes were remarkably down-regulated in the larvae. Furthermore, a different allelic frequency and enzymatic activity of the triose phosphate isomerase (TPI) was present in the tolerant versus naïve flies. The transcriptional suppressor, hairy, was up-regulated in the microarrays and its binding elements were present in the regulatory region of the specifically down-regulated metabolic genes but not others, and mutations in hairy significantly reduced hypoxia tolerance. We conclude that, the hypoxia-selected flies: (a) altered their gene expression and genetic code, and (b) coordinated their metabolic suppression, especially during development, with hairy acting as a metabolic switch, thus playing a crucial role in hypoxia-tolerance.