Hypoxia inducible factor 1 (HIF-1), the master regulator of hypoxia-activated genes, is involved in many diseases and is a valid drug target. In order to develop a simple and genetically tractable in vivo system for HIF-1 analysis, we tested the inducible expression of both human HIF-1 subunits (HIF-1alpha and ARNT) in the yeast Saccharomyces cerevisiae and showed the formation of transcriptionally active HIF-1. The use of this system for the identification and characterization of HIF-1 effectors was first validated by showing that two chemical Hsp90 inhibitors, geldanamycin and radicicol, impaired the activity of HIF-1 in yeast. By applying this system in mutant yeast strains, we then identified Hsp90 co-chaperones, which were required for HIF-1 activity. Furthermore, using yeast strains co-expressing truncated forms of HIF-1alpha with ARNT or both HIF-1alpha and ARNT, we characterized fragments of HIF-1alpha that acted as dominant negative mutants and suppressed HIF-1 activity.