Hypoxia inducible factors (HIFs) are activated in many tumors and show either promoter or suppressor activity, depending on tumor cell biology and background. However, the role of HIF member HIF‐2α remains unclear in hepatocellular carcinoma (HCC). Here, HIF‐2α expression was measured in HCC and paired peritumoral tissues by quantitative real‐time polymerase chain reaction, western blotting, and immunofluorescence assays, and the clinical significance was explored in 246 HCC patients. In cell culture, HIF‐2α levels were up‐regulated or down‐regulated by use of expression or short hairpin RNA recombinant plasmid, respectively. Cells were analyzed by immunoblotting, chromatin immunoprecipitation coupled with microarray, coimmunoprecipitation, and immunohistochemical staining. In vivo tumor growth was analyzed in nude mice. We found that the average expression of HIF‐2α was relatively low in HCC tissues, and the decreased level was associated with lower overall survival (P = 0.006). High HIF‐2α expression in HCC cells induced higher levels of apoptosis and expression of proapoptotic proteins and inhibited cell and tumor growth. Furthermore, HIF‐2α inhibited expression of the novel target gene, transcription factor dimerization partner 3 (TFDP3). TFDP3 protein was found to bind with E2F transcription factor 1 (E2F1) and inhibit its transcriptional activity through both p53‐dependent and ‐independent pathways. Reintroduction of TFDP3 expression reversed HIF‐2α‐induced apoptosis. Conclusions: Data gathered from cell lines, tumorigenicity studies, and primary HCC samples demonstrate a negative role of HIF‐2α in tumors, which is mediated by the TFDP3/E2F1 pathway. Our study provides evidence supporting a possible tumor‐suppressor role for HIF‐2α and has uncovered a mechanism that links HIF‐2α to a fundamental biological regulator, E2F1. (HEPATOLOGY 2013)