Hepatocellular carcinoma (HCC) represents a significant global health burden, necessitating an in‐depth exploration of its molecular underpinnings to facilitate the development of effective therapeutic strategies. This investigation delves into the complex role of long non‐coding RNAs (lncRNAs) in the modulation of hypoxia‐induced HCC progression, with a specific emphasis on delineating and functionally characterizing the novel KLF4/Lnc18q22.2/ULBP3 axis. To elucidate the effects of hypoxic conditions on HCC cells, we established in vitro models under both normoxic and hypoxic environments, followed by lncRNA microarray analyses. Among the lncRNAs identified, Lnc18q22.2 was found to be significantly upregulated in HCC cells subjected to hypoxia. Subsequent investigations affirmed the oncogenic role of Lnc18q22.2, highlighting its critical function in augmenting HCC cell proliferation and migration. Further examination disclosed that Kruppel‐like factor 4 (KLF4) transcriptionally governs Lnc18q22.2 expression in HCC cells, particularly under hypoxic stress. KLF4 subsequently enhances the tumorigenic capabilities of HCC cells through the modulation of Lnc18q22.2 expression. Advancing downstream in the molecular cascade, our study elucidates a novel interaction between Lnc18q22.2 and UL16‐binding protein 3 (ULBP3), culminating in the stabilization of ULBP3 protein expression. Notably, ULBP3 was identified as a pivotal element, exerting dual functions by facilitating HCC tumorigenesis and mitigating immune evasion in hypoxia‐exposed HCC cells. The comprehensive insights gained from our research delineate a hitherto unidentified KLF4/Lnc18q22.2/ULBP3 axis integral to the understanding of HCC tumorigenesis and immune escape under hypoxic conditions. This newly unveiled molecular pathway not only enriches our understanding of hypoxia‐induced HCC progression but also presents novel avenues for therapeutic intervention.