Introduction The tyrosine phosphatase SHP-1 negatively influences endothelial function, such as VEGF signaling and reactive oxygen species (ROS) formation, and has been shown to influence angiogenesis during tissue ischemia. In ischemic tissues, hypoxia induced angiogenesis is crucial for restoring oxygen supply. However, the exact mechanism how SHP-1 affects endothelial function during ischemia or hypoxia remains unclear. We performed in vitro endothelial cell culture experiments to characterize the role of SHP-1 during hypoxia. Results SHP-1 knock-down by specific antisense oligodesoxynucleotides (AS-Odn) increased cell growth as well as VEGF synthesis and secretion during 24 hours of hypoxia compared to control AS-Odn. This was prevented by HIF-1 alpha inhibition (echinomycin and apigenin). SHP1 knock-down as well as overexpression of a catalytically inactive SHP-1 (SHP-1 CS) further enhanced HIF-1 alpha protein levels, whereas overexpression of a constitutively active SHP-1 (SHP-1 E74A) resulted in decreased HIF-1 alpha levels during hypoxia, compared to wildtype SHP-1. Proteasome inhibition (MG132) returned HIF-1 alpha levels to control or wildtype levels respectively in these cells. SHP-1 silencing did not alter HIF-1 alpha mRNA levels. Finally, under hypoxic conditions SHP-1 knock-down enhanced intracellular endothelial reactive oxygen species (ROS) formation, as measured by oxidation of H-2-DCF and DHE fluorescence. Conclusions SHP-1 decreases half-life of HIF-1 alpha under hypoxic conditions resulting in decreased cell growth due to diminished VEGF synthesis and secretion. The regulatory effect of SHP-1 on HIF-1 alpha stability may be mediated by inhibition of endothelial ROS formation stabilizing HIF-1 alpha protein. These findings highlight the importance of SHP-1 in hypoxic signaling and its potential as therapeutic target in ischemic diseases.