Hypoxia is a state of low oxygen availability that limits tumor growth. The mechanism of protein synthesis inhibition by hypoxia and its circumvention by transformation are not well understood. Hypoxic breast epithelial cells are shown to downregulate protein synthesis by inhibition of the kinase mTOR, which suppresses mRNA translation through a novel mechanism mitigated in transformed cells: disruption of proteasome-targeted degradation of eukaryotic elongation factor 2 (eEF2) kinase and activation of the regulatory protein 4E-BP1. In transformed breast epithelial cells under hypoxia, the mTOR and S6 kinases are constitutively activated and the mTOR negative regulator tuberous sclerosis complex 2 (TSC2) protein fails to function. Gene silencing of 4E-BP1 and eEF2 kinase or TSC2 confers resistance to hypoxia inhibition of protein synthesis in immortalized breast epithelial cells. Breast cancer cells therefore acquire resistance to hypoxia by uncoupling oxygen-responsive signaling pathways from mTOR function, eliminating inhibition of protein synthesis mediated by 4E-BP1 and eEF2.