The alpha subunit of the voltage gated human ether-a-go-go-related (hERG) potassium channel regulates cell excitability in a broad range of cell lines. HERG channels are also expressed in a variety of cancer cells and control cell proliferation and apoptosis. Hypoxia, a common feature of tumors, alters gating properties of hERG currents in SH-SY5Y neuroblastoma cells. In the present study, we examined the molecular mechanisms and physiological significance underlying hypoxia-altered hERG currents in SH-SY5Y neuroblastoma cells. Hypoxia reduced the surface expression of 150kDa form and increased 125kDa form of hERG protein expression in the endoplasmic reticulum (ER). The changes in protein expression were associated with ~50% decrease in hERG potassium conductance. ER retention of hERG 125kDa form by CH was due to defective trafficking and was rescued by exposing cells to hypoxia at low temperatures or treatment with E-4031, a hERG channel blocker. Prolonged association of hERG with molecular chaperone Hsp90 resulting in complex oligomeric insoluble aggregates contributed to ER accumulation and trafficking defect. Hypoxia increased reactive oxygen species (ROS) levels and manganese (111) tetrakis (1methyl-4-pyridyl) porphyrin pentachloride, a membrane-permeable antioxidant prevented hypoxia-induced degradation of 150kDa and accumulation of 125kDa forms. Impaired trafficking of hERG by hypoxia was associated with reduced cell proliferation and this effect was prevented by antioxidant treatment. These results demonstrate that hypoxia through increased oxidative stress impairs hERG trafficking, leading to decreased K+ currents resulting in cell cycle arrest in SH-SY5Y cells.