Acute kidney injury (AKI) can lead to chronic kidney disease (CKD) if injury is severe and/or repair is incomplete. However, the pathogenesis of CKD following renal ischemic injury is not fully understood. Capillary rarefaction and tubular hypoxia are common findings during the AKI-to-CKD transition. We investigated the tubular stress response to hypoxia and demonstrated that a stress-responsive transcription factor, FoxO3, was regulated by prolyl hydroxylase (PHD). Hypoxia inhibited FoxO3 prolyl hydroxylation and FoxO3 degradation, leading to FoxO3 accumulation and activation in tubular cells. Hypoxia-activated HIF-1α contributed to FoxO3 activation and functioned to protect kidneys, as tubular deletion of HIF-1α decreased hypoxia-induced FoxO3 activation and resulted in more severe tubular injury and interstitial fibrosis following ischemic injury. Strikingly, tubular deletion of FoxO3 during the AKI-to-CKD transition aggravated renal structural and functional damage, leading to a much more profound CKD phenotype. We show that tubular deletion of FoxO3 resulted in decreased autophagic response and increased oxidative injury, which may explain renal protection by FoxO3. Our study indicates that in the hypoxic kidney, stress-responsive transcription factors can be activated for adaptions to counteract hypoxic insults, thus attenuating CKD development.