RNA-seq is commonly used to identify genetic modules that respond to a perturbation. Although transcriptomes have been mainly used for target gene discovery, the quantitative nature of these measurements makes them attractive structures with which to study genetic interactions. To understand whether whole-organism RNA-seq was suitable for genetic pathway reconstruction, we sequenced the transcriptome of four single mutants and two double mutants of the hypoxia pathway in C. elegans. Using principal component analysis or correlational analysis, we show that whole-organism transcriptomes contain sufficient information to identify genetic interactions. By comparing the expression levels of double mutants with their corresponding single mutants, we were able to determine, on a genome-wide level, that EGL-9 acts along VHL-1-dependent and independent branches to inhibit HIF-1. We were also able to observe genome-wide suppression of the egl-9(lf) phenotype in an egl-9(lf) hif-1(lf) double mutant. We show that genes along a pathway tend to decorrelate as a result of alternative regulatory modes and crosstalk; and that this decorrelation accurately reflects functional distance between genes. As a by-product of our analysis, we predict 195 genes under the regulation of hif-1, and 45 genes under the regulation of vhl-1. Finally, we are able to identify 31 genes that exhibit non-canonical epistasis: for these genes, vhl-1(lf) mutants show opposing effects to egl-9(lf) mutants, but the egl-9(lf);vhl-1(lf) exhibits the egl-9(lf) phenotype. We suggest that this non-canonical epistasis reflects unexplored aspects of the hypoxia pathway.