The hypoxia-inducible factor-1α (HIF-1α) pathway is the central regulator of adaptive responses to low oxygen availability and is required for normal skeletal development. Here, we demonstrate that the HIF-1α pathway is activated during bone repair and can be manipulated genetically and pharmacologically to improve skeletal healing. Mice lacking pVHL in osteoblasts with constitutive HIF-1α activation in osteoblasts had markedly increased vascularity and produced more bone in response to distraction osteogenesis, whereas mice lacking HIF-1α in osteoblasts had impaired angiogenesis and bone healing. The increased vascularity and bone regeneration in the pVHL mutants were VEGF dependent and eliminated by concomitant administration of VEGF receptor antibodies. Small-molecule inhibitors of HIF prolyl hydroxylation stabilized HIF/VEGF production and increased angiogenesis in vitro. One of these molecules (DFO) administered in vivo into the distraction gap increased angiogenesis and markedly improved bone regeneration. These results identify the HIF-1α pathway as a critical mediator of neoangiogenesis required for skeletal regeneration and suggest the application of HIF activators as therapies to improve bone healing. © 2008 by The National Academy of Sciences of the USA.