Hypoxia induces rapid and dramatic changes in cellular metabolism, in part through inhibition of target of rapamycin (TOR) kinase complex 1 (TORC1) activity. Genetic studies have shown the tuberous sclerosis tumor suppressors TSC1/2 and the REDD1 protein to be essential for hypoxia regulation of TORC1 activity in Drosophila and in mammalian cells. The molecular mechanism and physiologic significance of this effect of hypoxia remain unknown. Here, we demonstrate that hypoxia and REDD1 suppress mammalian TORC1 (mTORC1) activity by releasing TSC2 from its growth factor-induced association with inhibitory 14-3-3 proteins. Endogenous REDD1 is required for both dissociation of endogenous TSC2/14-3-3 and inhibition of mTORC1 in response to hypoxia. REDD1 mutants that fail to bind 14-3-3 are defective in eliciting TSC2/14-3-3 dissociation and mTORC1 inhibition, while TSC2 mutants that do not bind 14-3-3 are inactive in hypoxia signaling to mTORC1. In vitro, loss of REDD1 signaling promotes proliferation and anchorage-independent growth under hypoxia through mTORC1 dysregulation. In vivo, REDD1 loss elicits tumorigenesis in a mouse model, and down-regulation of REDD1 is observed in a subset of human cancers. Together, these findings define a molecular mechanism of signal integration by TSC1/2 that provides insight into the ability of REDD1 to function in a hypoxia-dependent tumor suppressor pathway.