Aberrantly enhanced vascular endothelial growth factor (VEGF) gene expression is associated with increased tumor growth and metastatic spread of solid malignancies, including human renal carcinomas. Persistent activation of STAT3 is linked to tumor‐associated angiogenesis, but underlying mechanisms remain unclear. Therefore, we examined whether STAT3 modulates the stability and activity of hypoxia‐inducible factor‐1α (HIF‐1α), and in turn enhances VEGF expression. We found that STAT3 was activated in ischemic rat kidneys and hypoxic human renal carcinoma cells. We also found that hypoxia‐induced activation of STAT3 transactivated the VEGF promoter and increased the expression of VEGF transcripts. Consistent with these findings, STAT3 inhibition attenuated the hypoxic induction of VEGF. Interestingly, activated STAT3 increased HIF‐1α protein levels due to the HIF‐1α stability by blocking HIF‐1α degradation and accelerated its de novo synthesis. The novel interaction of STAT3 with HIF‐1α was identified in hypoxic renal carcinoma cells. Furthermore, hypoxia recruited STAT3, HIF‐1α, and p300 to the VEGF promoter and induced histone H3 acetylation. Therefore, these findings provide compelling evidence that a causal relationship exists between STAT3 activation and HIF‐1‐dependent angiogenesis and suggest that therapeutic modalities designed to disrupt STAT3 signaling hold considerable promise for the blocking tumor growth and enhancing apoptosis of cancer cells and tissues.