Chronic rejection, manifested as small airway fibrosis (obliterative bronchiolitis [OB]), is the main obstacle to long-term survival in lung transplantation. Recent studies demonstrate that the airways involved in a lung transplant are relatively hypoxic at baseline and that OB pathogenesis may be linked to ischemia induced by a transient loss of airway microvasculature. Here, we show that HIF-1α mediates airway microvascular repair in a model of orthotopic tracheal transplantation. Grafts with a conditional knockout of Hif1a demonstrated diminished recruitment of recipient-derived Tie2+ angiogenic cells to the allograft, impaired repair of damaged microvasculature, accelerated loss of microvascular perfusion, and hastened denudation of epithelial cells. In contrast, graft HIF-1α overexpression induced via an adenoviral vector prolonged airway microvascular perfusion, preserved epithelial integrity, extended the time window for the graft to be rescued from chronic rejection, and attenuated airway fibrotic remodeling. HIF-1α overexpression induced the expression of proangiogenic factors such as Sdf1, Plgf, and Vegf, and promoted the recruitment of vasoreparative Tie2+ cells. This study demonstrates that a therapy that enhances vascular integrity during acute rejection may promote graft health and prevent chronic rejection.