Cholesterol biosynthesis is a highly regulated, oxygen-dependent pathway, vital for cell membrane integrity and growth. In fungi, the dependency on oxygen for sterol production has resulted in a shared transcriptional response, resembling prolyl hydroxylation of Hypoxia Inducible Factors (HIFs) in metazoans. Whether an analogous metazoan pathway exists is unknown. Here, we identify Sterol Regulatory Element Binding Protein 2 (SREBP2), the key transcription factor driving sterol production in mammals, as an oxygen-sensitive regulator of cholesterol synthesis. SREBP2 degradation in hypoxia overrides the normal sterol-sensing response, and is HIF independent. We identify MARCHF6, through its NADPH-mediated activation in hypoxia, as the main ubiquitin ligase controlling SREBP2 stability. Hypoxia-mediated degradation of SREBP2 protects cells from statin-induced cell death by forcing cells to rely on exogenous cholesterol uptake, explaining why many solid organ tumours become auxotrophic for cholesterol. Our findings therefore uncover an oxygen-sensitive pathway for governing cholesterol synthesis through regulated SREBP2-dependent protein degradation.