The topical application of minoxidil may achieve millimolar concentrations in the skin. We investigated whether millimolar minoxidil could induce vascular endothelial growth factor (VEGF), a possible effector for minoxidil-mediated hair growth, and how it occurred at the molecular level. Cell-based experiments were performed to investigate a molecular mechanism underlying the millimolar minoxidil induction of VEGF. The inhibitory effect of minoxidil on hypoxia-inducible factor (HIF) prolyl hydroxylase-2 (PHD-2) was tested by an in vitro von Hippel–Lindau protein (VHL) binding assay. To examine the angiogenic potential of millimolar minoxidil, a chorioallantoic membrane (CAM) assay was used. In human keratinocytes and dermal papilla cells, millimolar minoxidil increased the secretion of VEGF, which was not attenuated by a specific adenosine receptor antagonist that inhibits the micromolar minoxidil induction of VEGF. Millimolar minoxidil induced hypoxia-inducible factor-1α (HIF-1α), and the induction of VEGF was dependent on HIF-1. Moreover, minoxidil applied to the dorsal area of mice increased HIF-1α and VEGF in the skin. In an in vitro VHL binding assay, minoxidil directly inhibited PHD-2, thus preventing the hydroxylation of cellular HIF-1α and VHL-dependent proteasome degradation and resulting in the stabilization of HIF-1α protein. Minoxidil inhibition of PHD-2 was reversed by ascorbate, a cofactor of PHD-2, and the minoxidil induction of cellular HIF-1α was abrogated by the cofactor. Millimolar minoxidil promoted angiogenesis in the CAM assay, an in vivo angiogenic test, and this was nullified by the specific inhibition of VEGF. Our data demonstrate that PHD may be the molecular target for millimolar minoxidil-mediated VEGF induction via HIF-1.