Oxygen sensing transcription factor HIF-1 is activated due to accumulation of regulatory subunit HIF-1α by posttranslational stability mechanism during hypoxia or by several other stimuli even in normoxia. HIF-1α is also regulated by NF-kB mediated transcription mechanism. Reactive oxygen species (ROS) act as an important regulator of HIF-1 either by affecting prolyl hydroxylase activity, the critical determinant of HIF-1α stabilization or by activating NF-kB to promote HIF-1α transcription. Insulin is known to activate HIF-1 by a ROS dependent mechanism but the molecular mechanism of HIF-1α regulation is not known so far. Here we show that insulin regulates HIF-1α by a novel transcriptional mechanism by a ROS-sensitive activation of Sp1 in 3T3-L1 preadipocyte. Insulin shows little effect on HIF-1α protein stability, but increases HIF-1α promoter activity. Mutation analyses, electrophoretic mobility shift assay and chromatin immunoprecipitation assay confirm the role of Sp1 in HIF-1α transcription. We further demonstrate that insulin-induced ROS generation initiates signaling pathway involving phosphatidylinositol 3-kinase and protein kinase C for Sp1 mediated HIF-1α transcription. In summary, we reveal that insulin regulates HIF-1α by a novel transcriptional mechanism involving Sp1.