Solid organ transplantation mobilizes myeloid cells, including monocytes and macrophages, which are central protagonists of allograft rejection. However, myeloid cells can also be functionally reprogrammed by perioperative costimulatory blockade to promote a state of transplantation tolerance. Transplantation tolerance holds promise to reduce complications from chronic immunosuppression and promote long-term survival in transplant recipients. We sought to identify different mediators of transplantation tolerance by performing single-cell RNA sequencing of acute rejecting or tolerized cardiac allografts. This led to the unbiased identification of the transcription factor, hypoxia inducible factor (HIF)-2α, in a subset of tolerogenic monocytes. Using flow cytometric analyses and mice with conditional loss or gain of function, we uncovered that myeloid cell expression of HIF-2α was required for costimulatory blockade-induced transplantation tolerance. While HIF-2α was dispensable for mobilization of tolerogenic monocytes, which were sourced in part from the spleen, it promoted the expression of colony stimulating factor 1 receptor (CSF1R). CSF1R mediates monocyte differentiation into tolerogenic macrophages and was found to be a direct transcriptional target of HIF-2α in splenic monocytes. Administration of the HIF stabilizer, roxadustat, within micelles to target myeloid cells, increased HIF-2α in splenic monocytes, which was associated with increased CSF1R expression and enhanced cardiac allograft survival. These data support further exploration of HIF-2α activation in myeloid cells as a therapeutic strategy for transplantation tolerance.