Oxygen sensing is a fundamental biological process that is required for development, for successful transition from placental to lung respiration at birth, for normal oxygen homeostasis throughout life, and for tumor angiogenesis and progression at the end of life. Despite the importance of this process in health and disease, the molecular mechanisms by which cells trigger transcriptional and post-translational responses to hypoxia are not fully understood. Our model proposes that mitochondria function as cellular oxygen sensors through a process that involves interaction of molecular oxygen with Complex III of the electron transport chain. Hypoxia results in a paradoxical increase in the release of reactive oxygen species from the outer surface of the inner mitochondrial membrane. These signaling levels of oxidant stress lead to the activation of transcription factors including Hypoxia-Inducible Factor (HIF-1 and HIF-2) and NF-kB, and they trigger cell-specific post-translational responses to hypoxia. Stabilization of HIF-α protein in hypoxia is abrogated when genetic modifications to the electron transport chain lead to loss-of-function in terms of the ability to generate ROS signals during hypoxia. Conversely, genetic modifications to Complex II that induce a chronic increase in mitochondrial ROS production lead to the stabilization of HIF-α under normoxic conditions. In tumor cells, this gain-of-function leads to an increase in tumor cell growth in tissue culture and in vivo, which is mediated by the increase in HIF activation. These findings suggest that Complex III plays a dual role in the cell, through its involvement in energy transduction and in the detection of cellular hypoxia.