Macrophages are central in host defense mechanisms and in the development of chronic inflammatory diseases and tumors. Macrophages acquire their diverse functions in the tissue microenvironment. The anti-inflammatory cytokines interleukin (IL)-4 and IL-13 polarize macrophages toward an M2 phenotype with immunosuppressive functions, similar to tumor-associated macrophages. Hypoxic conditions occur in most solid tumors owing to an imbalance in oxygen supply and consumption, creating an immunosuppressive environment. We hypothesized that hypoxia may affect macrophage function and induce M2 macrophage polarization. We investigated the effect of hypoxia on IL-4/IL-13-induced expression of the M2 macrophage marker arginase-1 and an IL-4/IL-13-inducible gene in mouse macrophage-like cell lines. Although hypoxia (1% O2) alone did not induce Arg-1 expression, treatment of hypoxic RAW264.7 macrophages with IL-4/IL-13 synergistically enhanced Arg-1 expression with time. IL-4/IL-13-mediated Arg-1 expression depends on STAT6. Thus, phosphorylation and nuclear translocation of STAT6 were analyzed by western blotting. Unexpectedly, hypoxia suppressed phosphorylation and nuclear localization of STAT6 induced by IL-4/IL-13. Consistent with these results, a transient transfection assay using a luciferase reporter gene containing the STAT6 binding element showed that the STAT6-dependent transcription was suppressed by hypoxia. Thus, hypoxia negatively regulates transcriptional activity of IL-4/IL-13-induced STAT6. To locate the regulatory region responsible for the hypoxia-mediated up-regulation of Arg-1 expression, a luciferase reporter assay using a 3.8 kb (-31 to -3810 bp) fragment of the regulatory region of the Arg-1 gene was performed. Although IL-4/IL-13-induced transcriptional activity was observed in the reporter construct, hypoxia did not up-regulate the transcriptional activity of the reporter gene. The collective results indicate that synergistic induction of Arg-1 expression is independent of STAT6 and suggest that another regulatory region of the Arg-1 gene or post-transcriptional regulation might be involved in the hypoxia-mediated Arg-1 expression.