Alzheimer's disease (AD) is more prevalent following an ischemic or hypoxic episode, such as stroke. Indeed, brain levels of amyloid precursor protein (APP) and the cytotoxic amyloid β peptide (Aβ) fragment are enhanced in these patients and in animal models following experimental ischaemia. We have investigated the effect of chronic hypoxia (CH; 2.5% O₂, 24 h) on processing of APP in the human neuroblastoma, SH‐SY5Y. We demonstrate that constitutive and muscarinic‐receptor‐enhanced secretion of the α‐secretase cleaved fragment of APP, sAPPα, was reduced by ∼60% in CH cells. The caspase inhibitor BOC‐D(Ome)FMK did not reverse this effect of CH, and CH cells were as viable as controls, based on MTT assays. Thus, loss of sAPPα is not related to cell death or caspase processing of APP. Pre‐incubation with antioxidants did not reverse the effect of CH, and the effect could not be mimicked by H₂O₂, discounting the involvement of reactive oxygen species in hypoxic loss of sAPPα. CH did not affect muscarinic activation of extracellular‐signal regulated kinase. However, expression of ADAM 10 (widely believed to be α‐secretase) was decreased approximately 50% following CH. Thus, CH selectively decreases processing of APP by the α‐secretase pathway, most likely by decreasing levels of ADAM 10.