Physiological oxygen (O2) tensions in brain tissues vary widely, from approximately 5 to 40 Torr (1-6%), encompassing levels of moderate hypoxia that have often been considered neurotoxic in vitro. The effects of such hypoxia were examined in embryonic murine cortical neurons cultured continuously from plating in an atmosphere of 1% O2. Remarkably, cortical neurons thrived in 1% O2, with survival at 7-14 days significantly greater than that of neurons cultured in ambient conditions (20% O2). Immunostaining for microtubule-associated protein-2 (MAP-2) and NeuN confirmed the neuronal identity of surviving cells, and demonstrated robust development of dendritic structures and MAP-2 expression in hypoxia. Survival of neurons in 20% O2 could be promoted by transfer of medium conditioned by neurons in 1% O2, or by pharmacological induction of hypoxia-inducible factor-1alpha (HIF-1alpha), suggesting a possible role for secreted factors under transcriptional regulation by HIF-1 in the trophic effects of hypoxia. Vascular endothelial growth factor (VEGF), a factor regulated by HIF-1, was strongly stimulated in neurons cultured in 1% O2. Treatment of neurons with exogenous VEGF partially improved survival in 20% O2, and inhibitors of VEGF action reduced survival of neurons in 1% O2. These data point to the dynamic role played by hypoxia, associated with HIF-1 up-regulation, in promoting survival of cortical neurons, in part through stimulation of VEGF expression and release.