Caveolin-1 (CAV1) is an essential structural constituent of caveolae, specialized lipid raft microdomains on the cell membrane involved in endocytosis and signal transduction, which are inexplicably deregulated and are associated with aggressiveness in numerous cancers. Here we identify CAV1 as a direct transcriptional target of oxygen-labile hypoxia-inducible factor 1 and 2 that accentuates the formation of caveolae, leading to increased dimerization of EGF receptor within the confined surface area of caveolae and its subsequent phosphorylation in the absence of ligand. Hypoxia-inducible factor–dependent up-regulation of CAV1 enhanced the oncogenic potential of tumor cells by increasing the cell proliferative, migratory, and invasive capacities. These results support a concept in which a crisis in oxygen availability or a tumor exhibiting hypoxic signature triggers caveolae formation that bypasses the requirement for ligand engagement to initiate receptor activation and the critical downstream adaptive signaling during a period when ligands required to activate these receptors are limited or are not yet available.