Peripheral nerve injury (PNI) usually has a poor effect on functional recovery and severely declines the patient's quality of life. Our prior findings indicated that hypoxia remarkably promoted nerve regeneration of rats with sciatic nerve transection. However, the underlying molecular mechanisms of hypoxia in functional recovery of PNI still remain elusive. In this research, we tried to explain the functional roles and mechanisms of hypoxia and the hypoxia-inducible factor-1α (HIF-1α) in PNI. Our results indicated that hypoxia promoted proliferation and migration of dorsal root ganglia (DRG) and increased the expression of brain-derived neurotrophic factor (BDNF) and nerve growth factor (NGF). Mechanistically, hypoxia suppressed ferroptosis through activating HIF-1α in DRG neurons. Gain and loss of function studies were performed to evaluate the regulatory roles of HIF-1α in ferroptosis and neuron recovery. The results revealed that up-regulation of HIF-1α enhanced the expression of solute carrier family membrane 11 (SLC7A11) and glutathione peroxidase 4 (GPX4) and increased the contents of cysteine and glutathione, while inhibiting the accumulation of reactive oxygen species (ROS). Our findings provided novel light on the mechanism of ferroptosis involved in PNI and manifest hypoxia as a potential therapeutic strategy for PNI recovery.