Sporadic occurrence of transformed tumor cells is under the surveillance of the host immune system and such cells are effectively eliminated by immune-mediated cell death. During tumor progression, the antitumor effects of the tumor microenvironment are suppressed by diverse immunosuppressive mechanisms. In this research, we suggest novel immune evasion strategy of tumor cells through a transforming growth factor (TGF)-β1- and hypoxia-dependent mechanism. Experimental results showed that TGF-β1 and hypoxia induced mitogen-activated protein kinase phosphatase (MKP)-1 expression within 1 h, resulting in attenuation of c-Jun N-terminal kinase (JNK) phosphorylation and subsequent death receptor-mediated cell death. In addition, analysis of microarray data and immunostaining of MKP-1 in hepatocellular carcinoma (HCC) patient samples revealed that expression of MKP-1 is notably higher in tumors than in normal tissues, implying that MKP-1-dependent suppression of immune-mediated cell death takes place only in the tumor. To prove that MKP-1 can act as a mediator of immune escape by tumors, we determined whether chemo-resistance against several anticancer drugs could be overcome by knockdown of MKP-1. Cytotoxic assays showed that chemotherapy with siRNA targeting MKP-1 was significantly more effective than chemotherapy in the presence of MKP-1. Thus, we conclude that TGF-β1 and hypoxia ensure tumor cell survival and growth through expression of MKP-1.