Abstract It has been reported that the therapeutic effect of the proteasome inhibitor Velcade is due to its selective interference in the hypoxia pathway. We studied the effect of Velcade on tumor microenvironment and examined the underlying molecular mechanisms. We have generated a human colorectal cancer xenograft model (#C53) in which the hypoxia-inducible dual reporter fusion gene (HSV1-TK and eGFP) was under the control of hypoxia-response-element (HRE). In vitro, #C53 cells were treated with Velcade in normoxic and hypoxic conditions, and the following assays were performed in comparison with controls: eGFP (flow cytometry), CA9 (western blot), VEGF (ELISA), and TK activity (trapping of the marker substrate 14C-FIAU). In vivo, #C53 xenografts were treated with Velcade and various assays performed, including a) Dynamic contrast-enhanced (DCE) MRI pre and post treatment; b) dual hypoxia marker (pimonidazole and EF5) administration pre and post treatment; c) fluorescence microscopy of Hoechst 33342 (perfusion), eGFP, HIF-1α, and CA9; and d) plasma VEGF level (ELISA), Where applicable data from control and treated tumors were compared. Our results showed that in both in vitro and in vivo experiments Velcade treatment increased the level of HIF1α, but decreased those of hypoxia-induced eGFP, TK, CA9 and VEGF. Interestingly, in the dual hypoxia marker study there were significant EF5-positive regions that did not co-localize with pimonidazole-positive regions, suggesting de novo hypoxia and perhaps another novel effect of Velcade on tumor microvasculature. Consistent with these results, DCE MRI demonstrated decrease global tumor blood flow with Velcade treatment. Our data suggest that Velcade suppresses the hypoxia response by disrupting the HIF1 transcriptional activity. In addition, our results suggest a novel function of Velcade in modifying the tumor microenvironment and decreasing tumor perfusion as noninvasively detected by DCE MRI. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 101st Annual Meeting of the American Association for Cancer Research; 2010 Apr 17-21; Washington, DC. Philadelphia (PA): AACR; Cancer Res 2010;70(8 Suppl):Abstract nr 1381.