Loss of blood-brain barrier (BBB) integrity is believed to be an early and significant event in lesion pathogenesis in the inflammatory demyelinating disease multiple sclerosis (MS), and understanding mechanisms involved may lead to novel therapeutic avenues for this disorder. Well-differentiated endothelium forms the basis of the BBB, while astrocytes control the balance between barrier stability and permeability via production of factors that restrict or promote vessel plasticity. In this study, we report that the proinflammatory cytokine IL-1beta, which is prominently expressed in active MS lesions, causes a shift in the expression of these factors to favor plasticity and permeability. The transcription factor, hypoxia inducible factor-1 (HIF-1), plays a significant role in this switch. Using a microarray-based approach, we found that in human astrocytes, IL-1beta induced the expression of genes favoring vessel plasticity, including HIF-1alpha and its target, vascular endothelial growth factor-A (VEGF-A). Demonstrating relevance to MS, we showed that HIF-1alpha and VEGF-A were expressed by reactive astrocytes in active MS lesions, while the VEGF receptor VEGFR2/flk-1 localized to endothelium and IL-1 to microglia/macrophages. Suggesting functional significance, we found that expression of IL-1beta in the brain induced astrocytic expression of HIF-1alpha, VEGF-A, and BBB permeability. In addition, we confirmed VEGF-A to be a potent inducer of BBB permeability and angiogenesis, and demonstrated the importance of IL-1beta-induced HIF-1alpha in its regulation. These results suggest that IL-1beta contributes to BBB permeability in MS via reactivation of the HIF-VEGF axis. This pathway may represent a potential therapeutic target to restrict lesion formation.