The circadian clock gene Period2 (PER2) has been suggested to be a tumor suppressor. However, detailed mechanistic evidence has not been provided to support this hypothesis. We found that loss of PER2 enhanced invasion and activated expression of epithelial-mesenchymal transition (EMT) genes including TWIST1, SLUG, and SNAIL. This finding was corroborated by clinical observation that PER2 down-regulation was associated with poor prognosis in breast cancer patients. We further demonstrated that PER2 served as a transcriptional corepressor, which recruited polycomb proteins EZH2 and SUZ12 as well as HDAC2 to octamer transcription factor 1 (OCT1) (POU2F1) binding sites of the TWIST1 and SLUG promoters to repress expression of these EMT genes. Hypoxia, a condition commonly observed in tumors, caused PER2 degradation and disrupted the PER2 repressor complex, leading to activation of EMT gene expression. This result was further supported by clinical data showing a significant negative correlation between hypoxia and PER2. Thus, our findings clearly demonstrate the tumor suppression function of PER2 and elucidate a pathway by which hypoxia promotes EMT via degradation of PER2.