Synaptic structure and activity are sensitive to environmental alterations. Modulation of synaptic morphology and function is often induced by signals from glia. However, the process by which glia mediate synaptic responses to environmental perturbations such as hypoxia remains unknown. Here, we report that, in the mutant for Trachealess (Trh), the Drosophila homolog for NPAS1 and NPAS3, smaller synaptic boutons form clusters named satellite boutons appear at larval neuromuscular junctions (NMJs), which is induced by the reduction of internal oxygen levels due to defective tracheal branches. Thus, the satellite bouton phenotype in the trh mutant is suppressed by hyperoxia, and recapitulated in wild-type larvae raised under hypoxia. We further show that hypoxia-inducible factor (HIF)-1α/Similar (Sima) is critical in mediating hypoxia-induced satellite bouton formation. Sima upregulates the level of the Wnt/Wingless (Wg) signal in glia, leading to reorganized microtubule structures within presynaptic sites. Finally, hypoxia-induced satellite boutons maintain normal synaptic transmission at the NMJs, which is crucial for coordinated larval locomotion.