Prolyl hydroxylase domain‐containing proteins (PHDs) regulate the adaptation of cells to hypoxia. Pan‐hydroxylase inhibition is protective in experimental colitis, in which PHD1 plays a prominent role. However, it is currently unknown how PHD1 targeting regulates this protection and which cell type(s) are involved. Here, we demonstrated that Phd1 deletion in endothelial and haematopoietic cells (Phd1^f/fTie2:cre) protected mice from dextran sulphate sodium (DSS)‐induced colitis, with reduced epithelial erosions, immune cell infiltration, and colonic microvascular dysfunction, whereas the response of Phd2^f/+Tie2:cre and Phd3^f/fTie2:cre mice to DSS was similar to that of their littermate controls. Using bone marrow chimeras and cell‐specific cre mice, we demonstrated that ablation of Phd1 in haematopoietic cells but not in endothelial cells was both necessary and sufficient to inhibit experimental colitis. This effect relied, at least in part, on skewing of Phd1‐deficient bone marrow‐derived macrophages towards an anti‐inflammatory M2 phenotype. These cells showed an attenuated nuclear factor‐κB‐dependent response to lipopolysaccharide (LPS), which in turn diminished endothelial chemokine expression. In addition, Phd1 deficiency in dendritic cells significantly reduced interleukin‐1β production in response to LPS. Taken together, our results further support the development of selective PHD1 inhibitors for ulcerative colitis, and identify haematopoietic cells as their primary target. Copyright © 2016 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.