Aim Cyclosporin A (CsA) causes renal toxicity. The underlying mechanisms are incompletely understood, but may involve renal hypoxia and hypoxia‐inducible factors (Hifs). We sought for hypoxia and Hif in mouse kidneys with CsA‐induced toxicity, assessed their time course, Hif‐mediated responses and the impact of interventional Hif upregulation. Methods Mice received CsA or its solvent cremophore for up to 6 weeks. Low salt diet (Na+↓) was given in combination with CsA to enhance toxicity. We assessed fine morphology, renal function, blood oxygen level‐dependent magnetic resonance imaging under room air and following changes in breathing gas composition which correlate with vascular reactivity, pimonidazole adducts (which indicate O2 tensions below 10 mmHg), Hif‐α proteins, as well as expression of Hif target genes. Stable Hif upregulation was achieved by inducible, Pax8‐rtTA‐based knockout of von Hippel–Lindau protein (Vhl‐KO), which is crucial for Hif‐α degradation. Results Cyclosporin A transiently increased renal deoxyhaemoglobin (R2*). Augmented vascular reactivity was observed at 2 h, but decreased at 24 h after CsA treatment. Na+↓/CsA provoked chronic renal failure with tubular degeneration and interstitial fibrosis. Nephron segments at risk for injury accumulated pimonidazole adducts, as well as Hif‐α proteins. Remarkably, Hif target gene expression remained unchanged, while factor‐inhibiting Hif (Fih) was enhanced. Na+↓/CsA/Vhl‐KO aggravated morpho‐functional outcome of chronic renal CsA toxicity. Conclusions Cyclosporin A provokes episodic hypoxia in nephron segments most susceptible to chronic CsA toxicity. Fih is upregulated and likely blocks further Hif activity. Continuous tubular Hif upregulation via Vhl‐KO worsens the outcome of chronic CsA‐induced renal toxicity.