The interplay among hypoxia-inducible factor 1-alpha (HIF-1alpha), p53 and human orthologue of murine double minute 2 (Hdm2) has been introduced as a key event in tumor promotion and angiogenesis. Recently, nutlin-3, a small-molecule antagonist of Hdm2, was demonstrated to inhibit the HIF-1-mediated vascular endothelial growth factor production and tumor angiogenesis. Yet, the mechanism by which nutlin-3 inhibits HIF-1 is an open question. We here addressed the mode-of-action of nutlin-3 with respect to the HIF-1alpha-p53-Hdm2 interplay. The effect of nutlin-3 on HIF-1alpha function was examined by reporter analyses, immunoprecipitation and immunoblotting. Nutlin-3 downregulated HIF-1alpha, which occurred p53-dependently but von Hippel-Lindau-independently. On the contrary, nutlin-3 blunted the hypoxic induction of vascular endothelial growth factor by inactivating HIF-1 even in p53-null cells. The C-terminal transactivation domain (CAD) of HIF-1alpha was inactivated by nutlin-3, and furthermore, the factor-inhibiting hypoxia-inducible factor (FIH) hydroxylation of Asn803 was required for the nutlin-3 action. In terms of protein interactions, Hdm2 competed with FIH in CAD binding and inhibited the Asn803 hydroxylation both in vivo and in vitro, which facilitated p300 recruitment. Moreover, nutlin-3 reinforced the FIH binding and Ans803 hydroxylation by inhibiting Hdm2. In conclusion, Hdm2 functionally activates HIF-1 by inhibiting the FIH interaction with CAD, and the Hdm2 inhibition by nutlin-3 results in HIF-1 inactivation and vascular endothelial growth factor suppression. The interplays among HIF-1alpha, Hdm2, FIH and p300 could be potential targets for treating tumors overexpressing HIF-1alpha.