Thalidomide is used in clinical practice to treat gastrointestinal vascular malformation (GIVM), but the pathogenesis of GIVM is not clear. Hypoxia inducible factor 1 alpha (HIF-1α) and 2 alpha (HIF-2α/EPAS1) are in the same family and act as master regulators of the adaptive response to hypoxia. HIF-1α and HIF-2α are up-regulated in vascular malformations in intestinal tissues from GIVM patients, but not in adjacent normal vessels. Therefore, we investigated the role of HIF-1α and HIF-2α during angiogenesis and the mechanism of thalidomide action. In vitro experiments confirmed that vascular endothelial growth factor (VEGF) was a direct target of HIF-2α and that HIF-1α and HIF-2α regulated NOTCH1, Ang2, and DLL4, which enhanced vessel-forming of endothelial cells. Thalidomide down-regulated the expression of HIF-1α and HIF-2α and inhibited angiogenesis. In vivo zebrafish experiments suggested that HIF-2α overexpression was associated with abnormal subintestinal vascular (SIV) sprouting, which was reversed by thalidomide. This result indicated that thalidomide regulated angiogenesis via the inhibition of HIF-1α and HIF-2α expression, which further regulated downstream factors, including VEGF, NOTCH1, DLL4, and Ang2. The abnormally high expression of HIF-1α and HIF-2α may contribute to GIVM.