Hypoxia has emerged as a key determinant of osteogenesis. HIF-1α is the transcription factor mediating hypoxia responses that include induction of VEGF and related bone induction. Inflammatory signals antagonize bone repair via the NF-κB pathway. The present investigation explored the functional relationship of hypoxia (HIF-1α function) and inflammatory signaling (NF-κB) in stem like and osteoprogenitor cell lines. The potential interaction between HIF-1α and NF-κB signaling was explored by co-transfection studies in hFOB with p65, HIF-1α and 9x-HRE-luc or HIF-1α target genes reporter plasmids. Nuclear cross-talk was directly tested using the mammalian Gal4/VP16 two-hybrid, and confirmed by co-immunoprecipitation/western blotting assays. The results show that inflammatory stimulation (TNF-α treatment) causes a marked inhibition of HIF-1α function at the HRE in all cell lines studied. Also, co-transfection with p65 expression vector leads to reduced hVEGFp transcription after DFO-induced hypoxia. However, TNF-α treatment had little effect on HIF-1α mRNA levels. The functional interaction of Gal4-HIF-1α and VP16-p300 fusion proteins is effectively blocked by expression of p65 in a dose dependent manner. It was concluded that NF-κB-mediated inflammatory signaling is able to block HIF-1α transactivation at HRE-encoding genes by direct competition for p300 binding at the promoter. Inflammation may influence the stem cell niche and tissue regeneration by influencing cellular responses to hypoxia.