Tumor budding in colorectal cancer is a hallmark of unfavorable tumor biology correlating with advanced tumor stage, lymphovascular invasion, metastasis and cancer-specific death. Hypoxia, one of the most important microenvironmental changes in solid tumors, has been found to activate HIF-1α, the key actor of the intracellular hypoxia pathway, and subsequently promotes tumor progression/metastasis. The aim of the study is to investigate the association of microenvironment hypoxia and HIF-1α activation in tumor budding and their impact on colorectal cancer biology. Our data revealed that HIF-1α was strongly expressed in tumor budding cells at the invasive front of tumor and its expression was significantly increased in HCT116 colon cancer cells after hypoxia exposure. The microvessel density was significantly increased at the invasive front of high-grade tumor budding group than the low-grade tumor budding group. Phospho-AKT, a cell survival serine/threonine protein kinase, was strongly expressed in tumor budding cells and HCT116 colon cancer cells after hypoxia exposure. The proliferation index (Ki-67) of tumor budding cells is significantly low as compared to the tumor cells from the main tumor. The hypoxic HCT116 colon cancer cells showed increased cell cycle arrest as compared to those in normoxic condition. Our data demonstrated that tumor budding cells in hypoxic microenvironment and HCT116 colon cancer cells under hypoxia exposure show increased expression of HIF-1α, and HIF-1α activation may be a key factor in tumor cell survival, angiogenesis and therapy resistance and hence confers aggressive behavior of colorectal cancers with high-grade tumor budding.