Hypoxia signaling influences tumor development through both cell-intrinsic and -extrinsic pathways. Inhibiting hypoxia-inducible factor (HIF) function has recently been approved as a cancer treatment strategy. Hence, it is important to understand how regulators of HIF may affect tumor growth under physiological conditions. Here we report that in aging mice factor-inhibiting HIF (FIH), one of the most studied negative regulators of HIF, is a haploinsufficient suppressor of spontaneous B cell lymphomas, particular pulmonary B cell lymphomas. FIH deficiency alters immune composition in aged mice and creates a tumor-supportive immune environment demonstrated in syngeneic mouse tumor models. Mechanistically, FIH-defective myeloid cells acquire tumor-supportive properties in response to signals secreted by cancer cells or produced in the tumor microenvironment with enhanced arginase expression and cytokine-directed migration. Together, these data demonstrate that under physiological conditions, FIH plays a key role in maintaining immune homeostasis and can suppress tumorigenesis through a cell-extrinsic pathway.