Organisms have evolved adaptive mechanisms in response to stress for cellular survival. During acute hypoxic stress, cells down-regulate energy-consuming enzymes such as Na,K-ATPase. Within minutes of alveolar epithelial cell (AEC) exposure to hypoxia, protein kinase C zeta (PKCζ) phosphorylates the α₁-Na,K-ATPase subunit and triggers it for endocytosis, independently of the hypoxia-inducible factor (HIF). However, the Na,K-ATPase activity is essential for cell homeostasis. HIF induces the heme-oxidized IRP2 ubiquitin ligase 1L (HOIL-1L), which leads to PKCζ degradation. Here we report a mechanism of prosurvival adaptation of AECs to prolonged hypoxia where PKCζ degradation allows plasma membrane Na,K-ATPase stabilization at ∼50% of normoxic levels, preventing its excessive down-regulation and cell death. Mice lacking HOIL-1L in lung epithelial cells (Cre^SPC/HOIL-1L^fl/fl) were sensitized to hypoxia because they express higher levels of PKCζ and, consequently, lower plasma membrane Na,K-ATPase levels, which increased cell death and worsened lung injury. In AECs, expression of an α₁-Na,K-ATPase construct bearing an S18A (α₁-S18A) mutation, which precludes PKCζ phosphorylation, stabilized the Na,K-ATPase at the plasma membrane and prevented hypoxia-induced cell death even in the absence of HOIL-1L. Adenoviral overexpression of the α₁-S18A mutant Na,K-ATPase in vivo rescued the enhanced sensitivity of Cre^SPC/HOIL-1L^fl/fl mice to hypoxic lung injury. These data suggest that stabilization of Na,K-ATPase during severe hypoxia is a HIF-dependent process involving PKCζ degradation. Accordingly, we provide evidence of an important adaptive mechanism to severe hypoxia, whereby halting the exaggerated down-regulation of plasma membrane Na,K-ATPase prevents cell death and lung injury.