Diminished oxygen concentration within growing tumors may stimulate neovascularization by inducing both up-regulation of angiogenic factors and down-regulation of antiangiogenic agents. A potentially important molecule in the growth of pituitary adenomas is prolactin (PRL), which can be cleaved by cathepsin-D to yield a 16-kDa form (16K-PRL) with potent antiangiogenic effects. We examined the expression of PRL in cultured GH4C1 pituitary adenoma cells after exposure to hypoxia (0.1% oxygen) for periods of 12 to 36 hours. In contrast to increased expression of the angiogenic factor vascular endothelial growth factor in hypoxic cells, PRL mRNA and levels of intracellular and secreted PRL were significantly reduced under hypoxia. The reduction was not attributable to a general suppression of either transcription or protein synthesis. Although 16K-PRL was not evident in conditioned medium at physiologic pH, lowering the pH to mimic the acidic tumor microenvironment resulted in generation of 16K-PRL, which was sharply reduced in medium drawn from hypoxic cells. Production of 16K-PRL was blocked by the cathepsin-D inhibitor pepstatin-A, and the reduced 16K-PRL formation in hypoxic-conditioned medium correlated with a decrease in secretion of cathepsin-D and its precursor, procathepsin-D. Thus, hypoxia acts upon GH4C1 cells to increase vascular endothelial growth factor expression, decrease PRL synthesis, and suppress conversion of PRL to 16K-PRL via inhibition of cathepsin-D proteolysis. These mechanisms may act in concert to stimulate angiogenesis in prolactinomas.