Inflammatory angiogenesis involves the induction of a novel gene ZC3H12A encoding MCP-1-induced protein-1 (MCPIP1) that has deubiquitinase and antidicer RNAse activities. If and how these enzymatic activities of MCPIP1 mediate the biological functions of MCPIP1 is unknown. Present studies with human umbilical vein endothelial cells suggest that MCPIP-induced angiogenesis is mediated via hypoxia-inducible factor (HIF-1α), vascular endothelial growth factor (VEGF) and silent information regulator (SIRT -1) induction that results in the inhibition of angiogenesis inhibitor, thrombospondin-1. MCPIP1 expression inhibited the production of the anti-angiogenic microRNAs -20b and -34a that repress the translation of HIF-1α and SIRT-1, respectively. RNase dead MCPIP mutant, D141N, not only did not induce angiogenesis but also inhibited the production of miR-20b and -34a suggesting that the anti-dicer RNase activity of MCPIP1 is involved in MCPIP mediated angiogenesis. Mimetics of miR-20b and -34a inhibited MCPIP1-induced angiogenesis confirming that MCPIP1suppresses the biogenesis of miRs-20b and -34a. Furthermore, our results indicate that MCPIP expression induces nuclear translocation of HIF-1α. We show that under hypoxia angiogenesis is mediated via induction of MCPIP1 and under normoxia, in vitro, MCPIP deubiquitinates ubiquitinated HIF-1α and the stabilized HIF-1α enters the nucleus to promote the transcription of its target genes, cyclooxygenase-2 and VEGF, suggesti ng that the deubiquitinase activity of MCPIP may also promoteangiogenesis. The present results show for the first time that the anti-dicer RNase activity of MCPIP1 is critical in mediating a biological function of MCPIP, namely angiogenesis.