Perinatal stress-induced hyperinsulinism is a common cause of persistent hypoglycemia in at-risk neonates. The hypoxia-inducible factor-1 (HIF-1) pathway regulates cellular adaptation in hypoxic conditions through hypoxia response elements. We hypothesize that perinatal hypoxia leads to activation of the HIF1 pathway causing increased insulin secretion from neonatal β-cells. We examined glucose homeostasis and insulin secretion in NeuroD1-Cre;VhlLoxp/Loxp(VhlbetaKO) and in hypoxic wild type (WT) mouse pups in the first week of life. In VhlbetaKO pups postnatal day 8 (P8), plasma glucose was significantly lower compared to littermate controls (76 vs 129 mg/dL). Plasma insulin (0.54 vs 0.27 ng/mL) and the insulin to glucose ratio were significantly greater in VhlbetaKO pups indicating a failure to suppress insulin secretion. VhlbetaKO islet perifusion showed the lower plasma glucose level was due to a lower threshold (5 mM) for glucose stimulated insulin secretion (GSIS) compared to controls (10 mM). To assess the consequences of perinatal hypoxia, we exposed WT mouse pups to hypoxia (10% O2) between embryonic day 18 and P6. Islets from the hypoxia exposed pups had a lower GSIS threshold (3 mM) compared to islets from normoxic pups (5 mM) at P6. Hypoxic islets also had a lower insulin secretion threshold when stimulated with BCH, a glutamate dehydrogenase activator, or tolbutamide, a KATP channel inhibitor, suggesting that HIF1 pathway activation leads to a decreased stimulus threshold for secretion at or distal to the KATP channel. Patch clamps revealed that β-cells from hypoxic pups were more depolarized than normoxic controls. Our results show that the HIF1 pathway is critical for setting the GSIS threshold and a potential mediator of PSHI. We posit perinatal hypoxia and the HIF1 pathway at the core of β-cell maturational defects leading to increased risk of diabetes in adult life and the long-sought answer to the cause of perinatal stress-induced hyperinsulinism. Disclosure C.Juliana: Research Support; Crinetics Pharmaceuticals, Inc., Twist Bioscience, AmideBio. D.De leon: Consultant; Zealand Pharma A/S, Crinetics Pharmaceuticals, Inc., Eiger BioPharmaceuticals, Hanmi Pharm. Co., Ltd., Research Support; Ultragenix, Crinetics Pharmaceuticals, Inc., Hanmi Pharm. Co., Ltd., Rezolute, Inc.