Hypoxia-inducible factor-1 (HIF-1) is a known cancer progression factor, promoting growth, spread, and metastasis. However, in selected contexts, HIF-1 is a tumor suppressor coordinating hypoxic cell cycle suppression and apoptosis. Prior studies focused on HIF-1 function in established malignancy; however, little is known about its role during the entire process of carcinogenesis from neoplasia induction to malignancy. Here, we tested HIF-1 gain of function during multistage murine skin chemical carcinogenesis in K14-HIF-1alpha(Pro402A564G) (K14-HIF-1alphaDPM) transgenic mice. Transgenic papillomas appeared earlier and were more numerous (6 +/- 3 transgenic versus 2 +/- 1.5 nontransgenic papillomas per mouse), yet they were more differentiated, their proliferation was lower, and their malignant conversion was profoundly inhibited (7% in transgenic versus 40% in nontransgenic mice). Moreover, transgenic cancers maintained squamous differentiation whereas epithelial-mesenchymal transformation was frequent in nontransgenic malignancies. Transgenic basal keratinocytes up-regulated the HIF-1 target N-myc downstream regulated gene-1, a known tumor suppressor gene in human malignancy, and its expression was maintained in transgenic papillomas and cancer. We also discovered a novel HIF-1 target gene, selenium binding protein-1 (Selenbp1), a gene of unknown function whose expression is lost in human cancer. Thus, HIF-1 can function as a tumor suppressor through transactivation of genes that are themselves targets for negative selection in human cancers.