Intervertebral disc degeneration is the leading cause of chronic back pain. Recent studies show that raised level of SDC4, a cell-surface heparan sulfate (HS) proteoglycan, plays a role in pathogenesis of disc degeneration. However, in nucleus pulposus (NP) cells of the healthy intervertebral disc, the mechanisms that control expression of SDC4 and its physiological function are unknown. Hypoxia induced SDC4 mRNA and protein expression by ~2.4- and 4.4-fold (P<0.05), respectively, in NP cells. While the activity of the SDC4 promoter containing hypoxia response element (HRE) was induced 2-fold (P<0.05), the HRE mutation decreased the activity by 40% in hypoxia. Transfections with plasmids coding prolyl-4-hydroxylase domain protein 2 (PHD2) and ShPHD2 show that hypoxic expression of SDC4 mRNA and protein is regulated by PHD2 through controlling hypoxia-inducible factor 1α (HIF-1α) levels. Although overexpression of HIF-1α significantly increased SDC4 protein levels, stable suppression of HIF-1α and HIF-1β decreased SDC4 expression by 50% in human NP cells. Finally, suppression of SDC4 expression, as well as HS function, resulted in an ~2-fold increase in sex-determining region Y (SRY)-box 9 (Sox9) mRNA, and protein (P<0.05) and simultaneous increase in Sox9 transcriptional activity and target gene expression. Taken together, our findings suggest that in healthy discs, SDC4, through its HS side chains, contributes to maintenance of the hypoxic tissue niche by controlling baseline expression of Sox9.