The hypoxia‐inducible factor 1α (HIF‐1α) is critically involved in tissue regeneration. Hence, the pharmacological prevention of HIF‐1α degradation by prolyl hydroxylase (PHD) under normoxic conditions is emerging as a promising option in regenerative medicine. Using a mouse model of ligature‐induced periodontitis and resolution, we tested the ability of an injectable hydrogel‐formulated PHD inhibitor, 1,4‐dihydrophenonthrolin‐4‐one‐3‐carboxylic acid (1,4‐DPCA/hydrogel), to promote regeneration of alveolar bone lost owing to experimental periodontitis. Mice injected subcutaneously with 1,4‐DPCA/hydrogel at the onset of periodontitis resolution displayed significantly increased gingival HIF‐1α protein levels and bone regeneration, as compared to mice treated with vehicle control. The 1,4‐DPCA/hydrogel‐induced increase in bone regeneration was associated with elevated expression of osteogenic genes, decreased expression of pro‐inflammatory cytokine genes, and increased abundance of FOXP3+ T regulatory (Treg) cells in the periodontal tissue. The enhancing effect of 1,4‐DPCA/hydrogel on Treg cell accumulation and bone regeneration was reversed by AMD3100, an antagonist of the chemokine receptor CXCR4 that mediates Treg cell recruitment. In conclusion, the administration of 1,4‐DPCA/hydrogel at the onset of periodontitis resolution promotes CXCR4‐dependent accumulation of Treg cells and alveolar bone regeneration, suggesting a novel approach for regaining bone lost due to periodontitis.