Hematopoietic stem cell (HSC) transplantation is a lifesaving therapy for a number of immunologic disorders. For effective transplant, HSCs must traffic from the peripheral blood to supportive bone marrow niches. We previously showed that HSC trafficking can be enhanced by ex vivo treatment of hematopoietic grafts with 16-16 dimethyl prostaglandin E₂ (dmPGE₂). While exploring regulatory molecules involved in dmPGE₂ enhancement, we found that transiently increasing the transcription factor hypoxia-inducible factor 1-α (HIF1α) is required for dmPGE₂-enhanced CXCR4 upregulation and enhanced migration and homing of stem and progenitor cells and that pharmacologic manipulation of HIF1α is also capable of enhancing homing and engraftment. We also now identify the specific hypoxia response element required for CXCR4 upregulation. These data define a precise mechanism through which ex vivo pulse treatment with dmPGE₂ enhances the function of hematopoietic stem and progenitor cells; these data also define a role for hypoxia and HIF1α in enhancement of hematopoietic transplantation.