A key function of blood vessels, to supply oxygen, is impaired in tumors because of abnormalities in their endothelial lining. PHD proteins serve as oxygen sensors and may regulate oxygen delivery. Therefore the role of endothelial PHD2 in vessel shaping by implanting tumors in PHD2+/− mice was studied. Haplodeficiency of PHD2 did not affect tumor vessel density or lumen size, but normalized the endothelial lining and vessel maturation. This resulted in improved tumor perfusion and oxygenation, and inhibited tumor cell invasion, intravasation and metastasis. Haplodeficiency of PHD2 redirected the specification of endothelial tip cells to a more quiescent phenotype of a filopodia-lacking “phalanx” cell type. Without being bound to a particular mechanism, this transition could at least in part be explained by upregulation of (soluble) VEGFR-1 and VE-cadherin. Thus, decreased activity of an oxygen sensor in hypoxic conditions prompts endothelial cells to readjust their shape and phenotype to restore oxygen supply. Inhibiting PHD2 may offer alternative therapeutic opportunities for anti-cancer therapy, or other therapies where vascular normalization is beneficial.