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Indiana University-Purdue University Indianapolis (IUPUI) / Hematopoietic stem cell (HSC) transplantation is a lifesaving therapy for a number of hematological disorders. However, to be effective, transplanted HSCs must efficiently “home” to supportive niches within the bone marrow. Limited HSC number and poor function are complications of transplant in some circumstances, and can lead to delayed engraftment and immune reconstitution, or in some cases, bone marrow failure. Enhancing HSC homing is a strategy to improve stem cell transplantation efficiency. We have previously shown that ex vivo treatment of mouse or human HSCs with 16-16 dimethyl PGE2 (dmPGE2) increases their bone marrow homing efficiency and engraftment, resulting in part from upregulation of surface CXCR4 expression. We now show that pulse-treatment of mouse or human HSPCs with dmPGE2 stabilizes HIF1α in HSPCs, and that similar treatment with the hypoxia mimetic DMOG produces analogous effects to dmPGE2 on HSPC CXCR4 expression and homing. This suggests that HIF1α is responsible for PGE2’s enhancing effects on HSPCs. Pharmacological inhibition of HIF1α stabilization in vitro with Sodium Nitroprusside (SNP), confirms the requirement of HIF1α for dmPGE2-enhanced migration and CXCR4 upregulation. Additionally, we confirm the requirement for HIF1α in dmPGE2-enhanced in vivo homing using a conditional knockout mouse model of HIF1α gene deletion. Finally, we validate that the hypoxia response element located 1.3kb from the transcriptional start site within the CXCR4 promoter is required for enhanced CXCR4 expression after PGE2 treatment. Interestingly, we also observe an increase in the small GTPase Rac1 after dmPGE2 treatment, as well as a defect in PGE2-enhanced migration and CXCR4 expression in Rac1 knockout HSPCs. Using state-of-the-art imaging technology we, confirm an increase in Rac1 and CXCR4 colocalization after dmPGE2 treatment that likely explains enhanced sensitivity of PGE2-treated HSPCs to SDF-1. Taken together, these results define a precise mechanism through which ex vivo pulse treatment of HSPC with dmPGE2 enhances HSPC function through alterations in cell motility and homing, and describe a role for hypoxia and HIF1α in enhancement of hematopoietic transplantation.