Hypoxia promotes angiogenesis, proliferation, invasion and metastasis of pancreatic cancer. Essentially all studies of the hypoxia pathway in pancreatic cancer research to date have focused on fully malignant tumors or cancer cell lines, but the potential role of HIFs in the progression of pre-malignant lesions has not been critically examined. Here, we show that HIF2α is expressed early in pancreatic lesions both in human and in a mouse model of pancreatic cancer. HIF2α is a potent oncogenic stimulus but its role in Kras-induced pancreatic neoplasia has not been discerned. We used the Ptf1aCre transgene to activate KrasG12D and delete Hif2α solely within the pancreas. Surprisingly, loss of Hif2α in this model led to not reduced but rather markedly higher number of mPanIN lesions. These low-grade mPanIN lesions, however, failed to progress to high-grade mPanINs, associated with exclusive loss of β-catenin and SMAD4. The concomitant loss of HIF2α as well as β-catenin and Smad4 was further confirmed in vitro, whereby silencing of Hif2α resulted in reduced β-catenin and Smad4 transcription. Thus, with oncogenic Ras expressed in the pancreas, HIF2α modulates Wnt-signaling during mPanIN progression, by maintaining appropriate levels of both Smad4 and β-catenin.