HIF prolyl hydroxylases (PHD1–3) are oxygen sensors that regulate the stability of the hypoxia-inducible factors (HIFs) in an oxygen-dependent manner. Here, we show that loss of Phd1 lowers oxygen consumption in skeletal muscle by reprogramming glucose metabolism from oxidative to more anaerobic ATP production through activation of a Pparα pathway. This metabolic adaptation to oxygen conservation impairs oxidative muscle performance in healthy conditions, but it provides acute protection of myofibers against lethal ischemia. Hypoxia tolerance is not due to HIF-dependent angiogenesis, erythropoiesis or vasodilation, but rather to reduced generation of oxidative stress, which allows Phd1-deficient myofibers to preserve mitochondrial respiration. Hypoxia tolerance relies primarily on Hif-2α and was not observed in heterozygous Phd2-deficient or homozygous Phd3-deficient mice. Of medical importance, conditional knockdown of Phd1 also rapidly induces hypoxia tolerance. These findings delineate a new role of Phd1 in hypoxia tolerance and offer new treatment perspectives for disorders characterized by oxidative stress.