Constitutive activation of Akt characterizes a high percentage of human melanomas and represents a poor prognostic factor of the disease. We show that Akt transforms melanocytes only in a hypoxic environment, which is found in normal skin. The synergy between Akt and hypoxia is HIF1 alpha mediated. Inhibition of HIF1 alpha decreases AM transformation capacity in hypoxia and tumor growth in vivo, while overexpression of HIF1 alpha allows anchorage-independent growth in normoxia and development of more aggressive tumors. Finally, we show that mTOR activity is necessary to maintain the transformed phenotype by sustaining HIF1 alpha activity. Taken together, these findings demonstrate that Akt hyperactivation and HIF1 alpha induction by normally occurring hypoxia in the skin significantly contribute to melanoma development.