OBJECTIVE: Stem cell transplantation has had modest success as a treatment for myocardial infarction (MI). One of the limitations is the poor stem cell survival and function in the diseased microenvironment. We studied whether and how prolyl hydroxylase domain protein 2 (PHD2), a cellular oxygen sensor, enhances stem cell cardioprotective effects after transplantation into infarcted hearts. METHODS and RESULTS: Both adipose-derived stem cells (ADSCs) and bone marrow mesenchymal stem cells (BM-MSCs) were used. Stem cells were transduced with lentiviral short hairpin RNA to silence PHD2 (shPHD2) and intramyocardially injected into infarcted heart in mice. ADSCs reduced cardiomyocyte apoptosis, fibrosis, and infarct size (MI+ADSCs: 39.4±3.3%;MI+PBS: 48.4±4.5%) and improved cardiac function (MI+ADSCs: 43.8±5.6%; MI+PBS: 37.2±3.0%). shPHD2-ADSCs exerted significantly more protection (infarct size: 22.6±3.0%; LVEF: 67.3±6.8%; p<0.05 vs. MI+ADSCs). PHD2 silencing induced greater ADSC survival (survival rate at 7 days post-transplantation: shPHD2-ADSCs: 14.7±4.2% vs. ADSCs: 3.4±0.8%, p<0.05), which was abolished by HIF-1alpha silencing. No ADSC gave rise to cardiomyocyte and ADSCs induced cardioprotection was mainly induced by paracrine function. Conditioned medium from shPHD2-ADSCs decreased cardiomyocyte apoptosis. Insulin-like growth factor-1 (IGF-1) levels were 3.8 times higher in the conditioned medium of shPHD2-ADSCs than ADSCs, and depletion of IGF-1 attenuated the cardioprotective effects of shPHD2-ADSC-conditioned medium. NF-kappaB activation was induced by shPHD2 to stimulate IGF-1 secretion via binding to the IGF-1 gene promoter. A combination of HIF-1alpha silencing and IGF-1 neurtralization blocked the beneficial effects of shPHD2-ADSCs for MI. Similar findings were observed with BM-MSCs. CONCLUSIONS: PHD2 silencing promotes stem cell survival in infarcted hearts and enhances their paracrine function to protect cardiomyocytes. Its prosurvival effect on stem cells is HIF-1alpha dependent, while it enhances stem cell paracrine function through NF-kappaB-mediated IGF-1 upregulation. PHD2 silencing in stem cells may be a novel strategy for enhancing the effectiveness of stem cell therapy after MI.