Cells sense oxygen availability using not only the absolute value for cellular oxygen in regard to its energetic and metabolic functions, but also the gradient from the cell surface to the lowest levels in the mitochondria. Signals are used for regulatory purposes locally as well as in the generation of cellular, tissue, and humoral remodeling. Lowered oxygen availability (hypoxia) is theoretically important in the consideration of pharmacology because (1) hypoxia can alter cellular function and thereby the therapeutic effectiveness of the agent, (2) therapeutic agents may potentiate or protect against hypoxia-induced pathology, (3) hypoxic conditions may potentiate or mitigate drug-induced toxicity, (4) hypoxia may alter drug metabolism and thereby therapeutic effectiveness, and (5) therapeutic agents might alter the relative coupling of blood flow and energy metabolism in an organ. The prototypic biochemical effect of hypoxia is related to its known role as a cofactor in a number of enzymatic reactions, e.g., oxidases and oxygenases, which are affected independently from the bioenergetic effect of low oxygen on energetic functions. The cytochrome P-450 family of enzymes is another example. Here, there is a direct effect of oxygen availability on the conformation of the enzyme, thereby altering the metabolism of drug substrates. Indirectly, the NADH/NAD+ ratio is increased with 10% inspired oxygen, leading not only to reduced oxidation of ethanol but also to reduction of azo- and nitro-compounds to amines and disulfides to sulfhydryls. With chronic hypoxia, many of these processes are reversed, suggesting that hypoxia induces the drug-metabolizing systems. Support for this comes from observations that hypoxia can induce the hypoxic inducible factors which in turn alters transcription and function of some but not all cytochrome P-450 isoforms. Hypoxia is identified as a cofactor in cancer expression and metastatic potential. Thus, the effects of hypoxia play an important role in pharmacology, and the signaling pathways that are affected by hypoxia could become new targets for novel therapy or avenues for prevention.