Cartilage tissue is avascular and hypoxic which regulates chondrocyte phenotype via stabilization of HIFs. Here, we investigated the role of hypoxia and HIFs in regulation of Rho and canonical Wnt signaling in chondrocytes. Our data demonstrates that hypoxia controls the expression of RhoA in chondrocytes in a context-dependent manner on the culturing conditions. Within a 3D microenvironment, hypoxia suppresses RhoA on which hypoxia-driven expression of chondrogenic markers depends. Conversely, hypoxia leads to upregulation of RhoA in chondrocytes on 2D with a failure in re-expression of chondrogenic markers. Similarly to RhoA, hypoxic regulation of Wnt/β-catenin signaling depends on the microenvironment. Hypoxia downregulates β-catenin within 3D hydrogels whereas it causes a potent increase on 2D. Hypoxia-induced suppression of canonical Wnt signaling in 3D contributes to the promotion of chondrogenic phenotype as induction of Wnt signaling abrogates the hypoxic re-differentiation of chondrocytes. Inhibiting Wnt/β-catenin signaling via stabilization of Axin2 leads to a synergistic enhancement of hypoxia-induced expression of chondrogenic markers. The effects of hypoxia on Rho and Wnt/β-catenin signaling are HIF-dependent as stabilizing HIFs under normoxia revealed similar effects on chondrocytes. The study reveals important insights on hypoxic signaling of chondrocytes and how hypoxia regulates cellular mechanisms depending on the cellular microenvironment.