Activating transcription factor 4 (ATF4) is a critical transcription factor for bone remodeling; however, its role in bone angiogenesis has not been established. Here we show that ablation of the Atf4 gene expression in mice severely impaired skeletal vasculature and reduced microvascular density of the bone associated with dramatically decreased expression of hypoxia-inducible factor 1α (HIF-1α) and vascular endothelial growth factor (VEGF) in osteoblasts located on bone surfaces. Results from in vivo studies revealed that hypoxia/reoxygenation induction of HIF-1α and VEGF expression leading to bone angiogenesis, a key adaptive response to hypoxic conditions, was severely compromised in mice lacking the Atf4 gene. Loss of ATF4 completely prevented endothelial sprouting from embryonic metatarsals, which was restored by addition of recombinant human VEGF protein. In vitro studies revealed that ATF4 promotion of HIF-1α and VEGF expression in osteoblasts was highly dependent upon the presence of hypoxia. ATF4 interacted with HIF-1α in hypoxic osteoblasts, and loss of ATF4 increased HIF-1α ubiquitination and reduced its protein stability without affecting HIF-1α mRNA stability and protein translation. Loss of ATF4 increased the binding of HIF-1α to prolyl hydroxylases, the enzymes that hydroxylate HIF-1a protein and promote its proteasomal degradation via the pVHL pathway. Furthermore, parathyroid hormone-related protein (PTHrP) and receptor activator of NF-κB ligand (RANKL), both well-known activators of osteoclasts, increased release of VEGF from the bone matrix and promoted angiogenesis through the protein kinase C- and ATF4-dependent activation of osteoclast differentiation and bone resorption. Thus, ATF4 is a new key regulator of the HIF/VEGF axis in osteoblasts in response to hypoxia and of VEGF release from bone matrix, two critical steps for bone angiogenesis.