Esophageal cancer (EC) is a familiar digestive tract tumor with highly lethal. The hypoxic environment has been demonstrated to be a significant factor in modulating malignant tumor progression and is strongly associated with the abnormal energy metabolism of tumor cells. Serine hydroxymethyl transferase 2 (SHMT2) is one of the most frequently expressed metabolic enzymes in human malignancies. The study was designed to investigate the biological functions and regulation mechanisms of SHMT2 in EC under hypoxia. We conducted RT-qPCR to assess SHMT2 levels in EC tissues and cells (TE-1 and EC109). EC cells were incubated under normoxia and hypoxia, respectively, and altered SHMT2 expression was evaluated through RT-qPCR, western blot, and immunofluorescence. The biological functions of SHMT2 on EC cells were monitored by performing CCK-8, EdU, transwell, sphere formation, glucose uptake, and lactate production assays. The SHMT2 protein lactylation was measured by immunoprecipitation and western blot. In addition, SHMT2-interacting proteins were analyzed by bioinformatics and validated by rescue experiments. SHMT2 was notably upregulated in EC tissues and cells. Hypoxia elevated SHMT2 protein expression, augmenting EC cell proliferation, migration, invasion, stemness, and glycolysis. In addition, hypoxia triggered lactylation of the SHMT2 protein and enhanced its stability. SHMT2 knockdown impeded the malignant phenotype of EC cells. Further mechanistic studies disclosed that SHMT2 is involved in EC progression by interacting with MTHFD1L. Hypoxia-induced SHMT2 protein lactylation and upregulated its protein level, which in turn enhanced MTHFD1L expression and accelerated the malignant progression of EC cells.