Mitochondrial dysfunction leads to loss of renal function and structure; however, the precise mechanisms by which mitochondrial function can regulate renal fibrosis remain unclear. Proximal tubular cells (PTCs) prefer fatty acid oxidation as their energy source and dysregulation of lipid metabolism has been linked to tubulointerstitial fibrosis (TIF). Here, we demonstrated that mitochondrial uncoupling protein 2 (UCP2) regulates TIF through the stimulation of lipid deposition and extracellular matrix (ECM) accumulation. We show that UCP2 expression was increased in human biopsy sample and mouse kidney tissues with TIF. Moreover, UCP2-deficient mice displayed mitigated renal fibrosis in I/R-induced mouse model of TIF. Consistent with these results, UCP2 deficiency displayed reduced lipid deposition and ECM accumulation in vivo and in vitro. In UCP2-deficient PTCs, inhibition of TIF resulted from downregulation of hypoxia-inducible factor-1α (HIF-1α), a key regulator of lipid metabolism and ECM accumulation. Furthermore, we describe a molecular mechanism by which UCP2 regulates HIF-1α stabilization through regulation of mitochondrial respiration and tissue hypoxia during TIF. HIF-1α inhibition by siRNA suppressed lipid and ECM accumulation by restoration of PPARα and CPT1α, as well as suppression of fibronectin and collagen I expression in PTCs. In conclusion, our results suggest that UCP2 regulates TIF by inducing the HIF-1α stabilization pathway in tubular cells. These results identify UCP2 as a potential therapeutic target in treating chronic renal fibrosis.