Renal fibrosis is the final stage of most progressive kidney diseases. Chronic kidney disease (CKD) is associated with high comorbidity and mortality. Thus, preventing fibrosis and thereby preserving kidney function increases the quality of life and prolongs the survival of patients with CKD. Many processes such as inflammation or metabolic stress modulate the progression of kidney fibrosis. Hypoxia has also been implicated in the pathogenesis of renal fibrosis, and oxygen sensing in the kidney is of outstanding importance for the body. The dysregulation of oxygen sensing in the diseased kidney is best exemplified by the loss of stimulation of erythropoietin production from interstitial cells in the fibrotic kidney despite anemia. Furthermore, hypoxia is present in acute or chronic kidney diseases and may affect all cell types present in the kidney including tubular and glomerular cells as well as resident immune cells. Pro- and antifibrotic effects of the transcription factors hypoxia-inducible factors 1 and 2 have been described in a plethora of animal models of acute and chronic kidney diseases, but recent advances in sequencing technologies now allow for novel and deeper insights into the role of hypoxia and its cell type-specific effects on the progression of renal fibrosis, especially in humans. Here, we review existing literature on how hypoxia impacts the development and progression of renal fibrosis.