Hematopoietic stem cells (HSCs) and hematopoietic progenitor cells (HPCs) play a vital role in replenishment of blood cells. In addition to growth factors, energy metabolism plays an important role in cellular proliferation. Oxidative phosphorylation that occurs in the mitochondria is the major source of ATP. In this study, we have investigated the role of peroxisome proliferator-activated-γ coactivator-1α (PGC-1α), a major regulator of mitochondrial biogenesis, in hematopoiesis. PGC-1α is expressed in HSC/HPCs. Loss of PGC-1α minimally affects basal hematopoiesis; however, it significantly impairs stress hematopoiesis. Recovery of hematopoiesis poststress involves rapid proliferation of HSC/HPCs. Growth factors stimulate HSC/HPC proliferation in a dose-dependent manner and this response is modulated by oxygen tension. Although severe hypoxic conditions inhibit HSC/HPC proliferation, mild hypoxia enhances the clonogenic potential; however, the mechanism underlying this phenomenon remains largely unknown. Our studies demonstrate that PGC-1α-mediated mitochondrial biogenesis is critical for the increased clonogenic potential of progenitors under mild hypoxia. Metabolic programming and increased glucose uptake can drive rapid progenitor cell proliferation under relatively low oxygen tension only if the HPC has the capacity to increase PGC-1α expression and mitochondrial biogenesis. Loss of PGC-1α also impairs the long-term repopulating potential of HSCs. Our findings may have therapeutic applications for rapid recovery of blood cells following myeloablation.