Patients with acute lung injury develop hypoxia, which may lead to lung dysfunction and aberrant tissue repair. Recent studies have suggested that epithelial-mesenchymal transition (EMT) contributes to pulmonary fibrosis. We sought to determine whether hypoxia induces EMT in alveolar epithelial cells (AEC). We found that hypoxia induced the expression of alpha-smooth muscle actin (alpha-SMA) and vimentin and decreased the expression of E-cadherin in transformed and primary human, rat, and mouse AEC, suggesting that hypoxia induces EMT in AEC. Both severe hypoxia and moderate hypoxia induced EMT. The reactive oxygen species (ROS) scavenger Euk-134 prevented hypoxia-induced EMT. Moreover, hypoxia-induced expression of alpha-SMA and vimentin was prevented in mitochondria-deficient rho(0) cells, which are incapable of ROS production during hypoxia. CoCl(2) and dimethyloxaloylglycine, two compounds that stabilize hypoxia-inducible factor (HIF)-alpha under normoxia, failed to induce alpha-SMA expression in AEC. Furthermore, overexpression of constitutively active HIF-1alpha did not induce alpha-SMA. However, loss of HIF-1alpha or HIF-2alpha abolished induction of alpha-SMA mRNA during hypoxia. Hypoxia increased the levels of transforming growth factor (TGF)-beta1, and preincubation of AEC with SB431542, an inhibitor of the TGF-beta1 type I receptor kinase, prevented the hypoxia-induced EMT, suggesting that the process was TGF-beta1 dependent. Furthermore, both ROS and HIF-alpha were necessary for hypoxia-induced TGF-beta1 upregulation. Accordingly, we have provided evidence that hypoxia induces EMT of AEC through mitochondrial ROS, HIF, and endogenous TGF-beta1 signaling.