The current hypothesis postulates that NFAT5 activation in the kidney's inner medulla is due to hypertonicity, resulting in cell protection. Additionally, the renal medulla is hypoxic (10–18 mmHg); however there is no information about the effect of hypoxia on NFAT5. Using in vivo and in vitro models, we evaluated the effect of reducing the partial pressure of oxygen (PO2) on NFAT5 activity. We found that 1) Anoxia increased NFAT5 expression and nuclear translocation in primary cultures of IMCD cells from rat kidney. 2) Anoxia increased transcriptional activity and nuclear translocation of NFAT5 in HEK293 cells. 3) The dose-response curve demonstrated that HIF-1α peaked at 2.5% and NFAT5 at 1% of O2. 4) At 2.5% of O2, the time-course curve of hypoxia demonstrated earlier induction of HIF-1α gene expression than NFAT5. 5) siRNA knockdown of NFAT5 increased the hypoxia-induced cell death. 6) siRNA knockdown of HIF-1α did not affect the NFAT5 induction by hypoxia. Additionally, HIF-1α was still induced by hypoxia even when NFAT5 was knocked down. 7) NFAT5 and HIF-1α expression were increased in kidney (cortex and medulla) from rats subjected to an experimental model of ischemia and reperfusion (I/R). 7) Experimental I/R increased the NFAT5-target gene aldose reductase (AR). 8) NFAT5 activators (ATM and PI3K) were induced in vitro (HEK293 cells) and in vivo (I/R kidneys) with the same timing of NFAT5. 8) Wortmannin, which inhibits ATM and PI3K, reduces hypoxia-induced NFAT5 transcriptional activation in HEK293 cells. These results demonstrate for the first time that NFAT5 is induced by hypoxia and could be a protective factor against ischemic damage.