Tumor hypoxia, which is caused by the rapid proliferation of tumor cells and aberrant vasculature in tumors, results in inadequate supplies of oxygen and nutrients to tumor cells. Paradoxically, these unfavorable growth conditions benefit tumor cell survival, although the mechanism is poorly understood. We have demonstrated for the first time that hypoxia inhibits TRAIL-induced apoptosis by blocking translocation of Bax from cytosol to the mitochondria in tumor cells. However, it is largely unknown how hypoxia-inhibited Bax translocation attenuates TRAIL-induced apoptosis. Here, we demonstrate that despite its inhibitory activity in TRAIL-induced apoptosis, hypoxia does not affect TRAIL-triggered proximal apoptotic signaling events, including caspase-8 activation and Bid cleavage. Instead, hypoxia inhibited processing of caspase-3, leading to incomplete activation of the caspase. Importantly, hypoxia-blocked translocation of Bax to the mitochondria significantly inhibited releasing the mitochondrial factors, such as cytochrome c and Smac/DIABLO, to the cytosol in response to TRAIL. It is well-known that complete processing/activation of caspase-3 requires Smac/DIABLO released from mitochondria. Therefore, our data indicate that an engagement of the apoptotic mitochondrial events leading to caspase-3 activation is blocked by hypoxia. Our data shed new light on understanding of the apoptotic signal transduction and targets regulated by tumor hypoxia.