While accumulating evidence suggests positive effects of exercise on executive function, such effects vary with environment. In particular, exercise in a hypoxic environment (hypobaric or normobaric hypoxia), leading to decreased oxygen supply, may dampen or cancel such effects. Thus, we further explore the relation between the effects of hypoxic exercise on executive function and their underlying neural mechanisms by monitoring changes of cortical activation patterns using functional near-infrared spectroscopy (fNIRS). Fifteen healthy participants performed color-word Stroop tasks (CWST) before and after a 10 min bout of moderate-intensity exercise (50%V̇O2peak) under normoxic and hypoxic conditions (fraction of inspired oxygen (FIO2) = 0.135). During the CWST, we monitored prefrontal activation using fNIRS. CWST performance under hypoxic conditions decreased compared with normoxic conditions. In addition, CWST-related activation in the left dorsolateral prefrontal cortex (DLPFC) was reduced after a bout of hypoxic exercise. There was statistically significant association between decreased CWST performance and activation in the left DLPFC. These results suggest that moderate exercise under normobaric hypoxic conditions has negative effects on executive function by reducing task-related activations in the DLPFC.