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Mitochondria are the main consumers of oxygen within the cell. How mitochondria sense oxygen levels remains unknown. Here we show an oxygen-sensitive regulation of TFAM, an activator of mitochondrial transcription and replication, whose alteration is linked to tumours arising in the von Hippel–Lindau syndrome. TFAM is hydroxylated by EGLN3 and subsequently bound by the von Hippel–Lindau tumour-suppressor protein, which stabilizes TFAM by preventing mitochondrial proteolysis. Cells lacking wild-type VHL or in which EGLN3 is inactivated have reduced mitochondrial mass. Tumorigenic VHL variants leading to different clinical manifestations fail to bind hydroxylated TFAM. In contrast, cells harbouring the Chuvash polycythaemia VHLR200W mutation, involved in hypoxia-sensing disorders without tumour development, are capable of binding hydroxylated TFAM. Accordingly, VHL-related tumours, such as pheochromocytoma and renal cell carcinoma cells, display low mitochondrial content, suggesting that impaired mitochondrial biogenesis is linked to VHL tumorigenesis. Finally, inhibiting proteolysis by targeting LONP1 increases mitochondrial content in VHL-deficient cells and sensitizes therapy-resistant tumours to sorafenib treatment. Our results offer pharmacological avenues to sensitize therapy-resistant VHL tumours by focusing on the mitochondria.