The development of intratumoral hypoxia, a hallmark of rapidly progressing solid tumors, renders tumor cells resistant to chemotherapy and radiation therapy. We have recently shown that inhibition of aldose reductase (AR), an enzyme that catalyzes the reduction of lipid aldehydes and their glutathione conjugates, prevents human colon cancer cell growth in culture as well as in nude mouse xenografts by inhibiting the NF-κB-dependent activation of oxidative stress-mediated inflammatory and carcinogenic markers. However, the role of AR in mediating hypoxic stress signals is not known. We therefore investigated the molecular mechanisms by which AR inhibition prevents the hypoxia-induced human colon cancer cells growth and invasion. Our results indicate that AR inhibition by the pharmacological inhibitor fidarestat or ablation by AR-specific siRNA prevents hypoxia-induced proliferation of HT29, SW480, and Caco-2 colon cancer cells. Furthermore, hypoxia-induced increase in the level of HIF-1α in colon cancer cells was significantly decreased by AR inhibition. During hypoxic conditions, treatment of HT29 cells with the AR inhibitor fidarestat significantly decreased the expression of vascular endothelial growth factor, a down target of HIF-1α, at both mRNA and protein levels and also prevented the activation of PI3K/AKT, GSK3β, Snail, and lysyl oxidase. Furthermore, inhibition of hypoxia-induced HIF-1α protein accumulation by AR inhibition was abolished in the presence of MG132, a potent inhibitor of the 26 S proteasome. In addition, AR inhibition also prevented the hypoxia-induced inflammatory molecules such as Cox-2 and PGE2 and expression of extracellular matrix proteins such as MMP2, vimentin, uPAR, and lysyl oxidase 2. In conclusion, our results indicate that AR mediates hypoxic signals, leading to tumor progression and invasion.