Soluble epoxide hydrolase (sEH) is an important pharmacological target because it metabolizes potent bioactive substrates, epoxyeicosatrienoinc acids (EETs) and other lipid epoxide. EETs have a variety of biological functions including angiogenesis and cancer metastasis. However, the regulation and physiological function of sEH is not well understood. In this study, we found that hypoxia significantly suppressed the expression of sEH in mouse liver and a human hepatoma cell line, Hep3B. Hypoxia promotes the proliferation of vascular endothelial cells or carcinoma cells. Knockdown of sEH in Hep3B cells induced vascular endothelial growth factor (VEGF) mRNA and cell growth, both of which were suppressed by overexpression of sEH. sEH has phosphatase activity as well as epoxide hydrolase (EH) activity. We prepared mutant clones which lacking EH or phosphatase activity using the amino acid change Asp335Ser or Asp9Ala, respectively. The effects of WT sEH on cell growth were lost by mutation of either the EH domain or phosphatase domain. However, mutation of the phosphatase domain but not EH domain did not influence the expression of VEGF. These results suggest that sEH plays an important role in the physiology of cells including proliferation and that the epoxide hydrolase and phosphatase domains of sEH have different biological functions.