The HIF family of hypoxia-inducible transcription factors are key mediators of the physiologic response to hypoxia, whose dysregulation promotes tumorigenesis. One important HIF-1 effector is the REDD1 protein, which is induced by HIF-1 and which functions as an essential regulator of TOR complex 1 (TORC1) activity in Drosophila and mammalian cells. Here we demonstrate a negative feedback loop for regulation of HIF-1 by REDD1, which plays a key role in tumor suppression. Genetic loss of REDD1 dramatically increases HIF-1 levels and HIF-regulated target gene expression in vitro and confers tumorigenicity in vivo. Increased HIF-1 in REDD1(-/-) cells induces a shift to glycolytic metabolism and provides a growth advantage under hypoxic conditions, and HIF-1 knockdown abrogates this advantage and suppresses tumorigenesis. Surprisingly, however, HIF-1 up-regulation in REDD1(-/-) cells is largely independent of mTORC1 activity. Instead, loss of REDD1 induces HIF-1 stabilization and tumorigenesis through a reactive oxygen species (ROS) -dependent mechanism. REDD1(-/-) cells demonstrate a substantial elevation of mitochondrial ROS, and antioxidant treatment is sufficient to normalize HIF-1 levels and inhibit REDD1-dependent tumor formation. REDD1 likely functions as a direct regulator of mitochondrial metabolism, as endogenous REDD1 localizes to the mitochondria, and this localization is required for REDD1 to reduce ROS production. Finally, human primary breast cancers that have silenced REDD1 exhibit evidence of HIF activation. Together, these findings uncover a specific genetic mechanism for HIF induction through loss of REDD1. Furthermore, they define REDD1 as a key metabolic regulator that suppresses tumorigenesis through distinct effects on mTORC1 activity and mitochondrial function.