diff --git a/qiskit/compiler/transpiler.py b/qiskit/compiler/transpiler.py
index 9c74d10a7b63..adf60ca91e56 100644
--- a/qiskit/compiler/transpiler.py
+++ b/qiskit/compiler/transpiler.py
@@ -218,7 +218,7 @@ def transpile(  # pylint: disable=too-many-return-statements
             * 2: heavy optimization
             * 3: even heavier optimization
 
-            If ``None``, level 1 will be chosen as default.
+            If ``None``, level 2 will be chosen as default.
         callback: A callback function that will be called after each
             pass execution. The function will be called with 5 keyword
             arguments,
@@ -312,7 +312,7 @@ def callback_func(**kwargs):
     if optimization_level is None:
         # Take optimization level from the configuration or 1 as default.
         config = user_config.get_config()
-        optimization_level = config.get("transpile_optimization_level", 1)
+        optimization_level = config.get("transpile_optimization_level", 2)
 
     if backend is not None and getattr(backend, "version", 0) <= 1:
         # This is a temporary conversion step to allow for a smoother transition
diff --git a/qiskit/transpiler/preset_passmanagers/generate_preset_pass_manager.py b/qiskit/transpiler/preset_passmanagers/generate_preset_pass_manager.py
index 6023f2a4b6aa..bdbac42c8055 100644
--- a/qiskit/transpiler/preset_passmanagers/generate_preset_pass_manager.py
+++ b/qiskit/transpiler/preset_passmanagers/generate_preset_pass_manager.py
@@ -19,6 +19,7 @@
 from qiskit.circuit.controlflow import CONTROL_FLOW_OP_NAMES
 from qiskit.circuit.library.standard_gates import get_standard_gate_name_mapping
 from qiskit.circuit.quantumregister import Qubit
+from qiskit.providers.backend import Backend
 from qiskit.providers.backend_compat import BackendV2Converter
 from qiskit.transpiler.coupling import CouplingMap
 from qiskit.transpiler.exceptions import TranspilerError
@@ -35,7 +36,7 @@
 
 
 def generate_preset_pass_manager(
-    optimization_level,
+    optimization_level=2,
     backend=None,
     target=None,
     basis_gates=None,
@@ -96,9 +97,10 @@ def generate_preset_pass_manager(
 
     Args:
         optimization_level (int): The optimization level to generate a
-            :class:`~.PassManager` for. This can be 0, 1, 2, or 3. Higher
-            levels generate more optimized circuits, at the expense of
-            longer transpilation time:
+            :class:`~.StagedPassManager` for. By default optimization level 2
+            is used if this is not specified. This can be 0, 1, 2, or 3. Higher
+            levels generate potentially more optimized circuits, at the expense
+            of longer transpilation time:
 
                 * 0: no optimization
                 * 1: light optimization
@@ -238,6 +240,16 @@ def generate_preset_pass_manager(
         ValueError: if an invalid value for ``optimization_level`` is passed in.
     """
 
+    # Handle positional arguments for target and backend. This enables the usage
+    # pattern `generate_preset_pass_manager(backend.target)` to generate a default
+    # pass manager for a given target.
+    if isinstance(optimization_level, Target):
+        target = optimization_level
+        optimization_level = 2
+    elif isinstance(optimization_level, Backend):
+        backend = optimization_level
+        optimization_level = 2
+
     if backend is not None and getattr(backend, "version", 0) <= 1:
         # This is a temporary conversion step to allow for a smoother transition
         # to a fully target-based transpiler pipeline while maintaining the behavior
diff --git a/releasenotes/notes/default-level-2-generate-preset-passmanager-ec758ddc896ae2d6.yaml b/releasenotes/notes/default-level-2-generate-preset-passmanager-ec758ddc896ae2d6.yaml
new file mode 100644
index 000000000000..ff5d57797860
--- /dev/null
+++ b/releasenotes/notes/default-level-2-generate-preset-passmanager-ec758ddc896ae2d6.yaml
@@ -0,0 +1,44 @@
+---
+features_transpiler:
+  - |
+    The ``optimization_level`` argument for the :func:`.generate_preset_pass_manager` function is
+    now optional. If it's not specified it will default to using optimization level 2. As the argument
+    is now optional, the first positional argument has been expanded to enable passing a :class:`.Target`
+    or a :class:`.BackendV2` as the first argument for more convenient construction. For example::
+
+      from qiskit.transpiler.preset_passmanager import generate_preset_pass_manager
+      from qiskit.providers.fake_provider import GenericBackendV2
+
+      backend = GenericBackendV2(100)
+
+      generate_preset_pass_manager(backend.Target)
+
+    will construct a default pass manager for the 100 qubit :class`.GenericBackendV2` instance.
+upgrade_transpiler:
+  - |
+    The default ``optimization_level`` used by the :func:`.transpile` function when one is not
+    specified has been changed to level 2. This makes it consistent with the default used
+    by :func:`.generate_preset_pass_manager` which is used internally by :func:`.transpile`. Optimization
+    level 2 provides a much better balance between the run time of the function and the optimizations it
+    performs, it's a better tradeoff to use by default.
+
+    The API of :func:`.transpile` remains unchanged because, fundamentally, level 2 and level 1
+    have the same semantics. If you were previously relying on the implicit default of level 1,
+    you can simply set the argument ``optimization_level=1`` when you call :func:`.transpile`.
+    Similarly you can change the default back in your local environment by using a user config
+    file and setting the ``transpile_optimization_level`` field to 1.
+
+    The only potential issue is that your transpilation workflow may be relying on an implicit trivial layout (where qubit 0
+    in the circuit passed to :func:`.transpile` is mapped to qubit 0 on the target backend/coupling,
+    1->1, 2->2, etc.) without specifying ``optimization_level=1``, ``layout_method="trivial"``, or
+    explicitly setting ``initial_layout`` when calling :func:`.transpile`. This behavior was a side
+    effect of the preset pass manager construction in optimization level 1 and is not mirrored in
+    level 2. If you need this behavior you can use any of the three options listed previously to make
+    this behavior explicit.
+
+    Similarly, if you were targeting a discrete basis gate set you may encounter an issue using the
+    new default with optimization level 2 (or running explicitly optimization level 3), as the additional optimization passes that run in
+    level 2 and 3 don't work in all cases with a discrete basis. You can explicitly set
+    ``optimization_level=1`` manually in this case. In general the transpiler does not currently
+    fully support discrete basis sets and if you're relying on this you should likely construct a
+    pass manager manually to build a compilation pipeline that will work with your target.
diff --git a/test/python/circuit/library/test_qft.py b/test/python/circuit/library/test_qft.py
index 1f5c9715dd7a..85837f0ac80c 100644
--- a/test/python/circuit/library/test_qft.py
+++ b/test/python/circuit/library/test_qft.py
@@ -139,7 +139,7 @@ def test_qft_num_gates(self, num_qubits, approximation_degree, insert_barriers):
         qft = QFT(
             num_qubits, approximation_degree=approximation_degree, insert_barriers=insert_barriers
         )
-        ops = transpile(qft, basis_gates=basis_gates).count_ops()
+        ops = transpile(qft, basis_gates=basis_gates, optimization_level=1).count_ops()
 
         with self.subTest(msg="assert H count"):
             self.assertEqual(ops["h"], num_qubits)
diff --git a/test/python/compiler/test_transpiler.py b/test/python/compiler/test_transpiler.py
index 77b63a3098bc..472fc732ca9a 100644
--- a/test/python/compiler/test_transpiler.py
+++ b/test/python/compiler/test_transpiler.py
@@ -517,11 +517,21 @@ def test_transpile_bell_discrete_basis(self):
 
         # Try with the initial layout in both directions to ensure we're dealing with the basis
         # having only a single direction.
+
+        # Use optimization level=1 because the synthesis that runs as part of optimization at
+        # higher optimization levels will create intermediate gates that the transpiler currently
+        # lacks logic to translate to a discrete basis.
         self.assertIsInstance(
-            transpile(qc, target=target, initial_layout=[0, 1], seed_transpiler=42), QuantumCircuit
+            transpile(
+                qc, target=target, initial_layout=[0, 1], seed_transpiler=42, optimization_level=1
+            ),
+            QuantumCircuit,
         )
         self.assertIsInstance(
-            transpile(qc, target=target, initial_layout=[1, 0], seed_transpiler=42), QuantumCircuit
+            transpile(
+                qc, target=target, initial_layout=[1, 0], seed_transpiler=42, optimization_level=1
+            ),
+            QuantumCircuit,
         )
 
     def test_transpile_one(self):
@@ -1318,6 +1328,7 @@ def test_transpile_calibrated_custom_gate_on_diff_qubit(self):
                 backend=GenericBackendV2(num_qubits=4),
                 layout_method="trivial",
                 seed_transpiler=42,
+                optimization_level=1,
             )
 
     def test_transpile_calibrated_nonbasis_gate_on_diff_qubit(self):
@@ -1334,7 +1345,7 @@ def test_transpile_calibrated_nonbasis_gate_on_diff_qubit(self):
         circ.add_calibration("h", [1], q0_x180)
 
         transpiled_circuit = transpile(
-            circ, backend=GenericBackendV2(num_qubits=4), seed_transpiler=42
+            circ, backend=GenericBackendV2(num_qubits=4), seed_transpiler=42, optimization_level=1
         )
         self.assertEqual(transpiled_circuit.calibrations, circ.calibrations)
         self.assertEqual(set(transpiled_circuit.count_ops().keys()), {"rz", "sx", "h"})
@@ -1781,7 +1792,7 @@ def test_approximation_degree_invalid(self):
             )
 
     def test_approximation_degree(self):
-        """Test more approximation gives lower-cost circuit."""
+        """Test more approximation can give lower-cost circuit."""
         circuit = QuantumCircuit(2)
         circuit.swap(0, 1)
         circuit.h(0)
@@ -1791,6 +1802,7 @@ def test_approximation_degree(self):
             translation_method="synthesis",
             approximation_degree=0.1,
             seed_transpiler=42,
+            optimization_level=1,
         )
         circ_90 = transpile(
             circuit,
@@ -1798,6 +1810,7 @@ def test_approximation_degree(self):
             translation_method="synthesis",
             approximation_degree=0.9,
             seed_transpiler=42,
+            optimization_level=1,
         )
         self.assertLess(circ_10.depth(), circ_90.depth())
 
diff --git a/test/python/primitives/test_backend_estimator.py b/test/python/primitives/test_backend_estimator.py
index c3deb0735ca1..626ba7625bc9 100644
--- a/test/python/primitives/test_backend_estimator.py
+++ b/test/python/primitives/test_backend_estimator.py
@@ -430,7 +430,7 @@ def test_layout(self, backend):
             backend.set_options(seed_simulator=15)
             with self.assertWarns(DeprecationWarning):
                 estimator = BackendEstimator(backend)
-                estimator.set_transpile_options(seed_transpiler=15)
+                estimator.set_transpile_options(seed_transpiler=15, optimization_level=1)
                 value = estimator.run(qc, op, shots=10000).result().values[0]
             if optionals.HAS_AER:
                 ref_value = -0.9954 if isinstance(backend, GenericBackendV2) else -0.916
@@ -446,7 +446,9 @@ def test_layout(self, backend):
             op = SparsePauliOp("IZI")
             with self.assertWarns(DeprecationWarning):
                 estimator = BackendEstimator(backend)
-                estimator.set_transpile_options(initial_layout=[0, 1, 2], seed_transpiler=15)
+                estimator.set_transpile_options(
+                    initial_layout=[0, 1, 2], seed_transpiler=15, optimization_level=1
+                )
                 estimator.set_options(seed_simulator=15)
                 value = estimator.run(qc, op, shots=10000).result().values[0]
             if optionals.HAS_AER:
diff --git a/test/python/primitives/test_primitive.py b/test/python/primitives/test_primitive.py
index f0401e771448..c2b6b8f14202 100644
--- a/test/python/primitives/test_primitive.py
+++ b/test/python/primitives/test_primitive.py
@@ -142,7 +142,7 @@ def test_with_scheduling(n):
                 qc = QuantumCircuit(1)
                 qc.x(0)
                 qc.add_calibration("x", qubits=(0,), schedule=custom_gate)
-                return transpile(qc, Fake20QV1(), scheduling_method="alap")
+                return transpile(qc, Fake20QV1(), scheduling_method="alap", optimization_level=1)
 
             keys = [_circuit_key(test_with_scheduling(i)) for i in range(1, 5)]
             self.assertEqual(len(keys), len(set(keys)))
diff --git a/test/python/providers/test_backend_v2.py b/test/python/providers/test_backend_v2.py
index 70330085b1ab..40924e240826 100644
--- a/test/python/providers/test_backend_v2.py
+++ b/test/python/providers/test_backend_v2.py
@@ -147,7 +147,7 @@ def test_transpile_respects_arg_constraints(self):
         qc = QuantumCircuit(2)
         qc.h(0)
         qc.cx(1, 0)
-        tqc = transpile(qc, self.backend)
+        tqc = transpile(qc, self.backend, optimization_level=1)
         self.assertTrue(Operator.from_circuit(tqc).equiv(qc))
         # Below is done to check we're decomposing cx(1, 0) with extra
         # rotations to correct for direction. However because of fp
@@ -163,7 +163,7 @@ def test_transpile_respects_arg_constraints(self):
         qc = QuantumCircuit(2)
         qc.h(0)
         qc.ecr(0, 1)
-        tqc = transpile(qc, self.backend)
+        tqc = transpile(qc, self.backend, optimization_level=1)
         self.assertTrue(Operator.from_circuit(tqc).equiv(qc))
         self.assertEqual(tqc.count_ops(), {"ecr": 1, "u": 4})
         self.assertMatchesTargetConstraints(tqc, self.backend.target)
@@ -173,7 +173,7 @@ def test_transpile_relies_on_gate_direction(self):
         qc = QuantumCircuit(2)
         qc.h(0)
         qc.ecr(0, 1)
-        tqc = transpile(qc, self.backend)
+        tqc = transpile(qc, self.backend, optimization_level=1)
         expected = QuantumCircuit(2)
         expected.u(0, 0, -math.pi, 0)
         expected.u(math.pi / 2, 0, 0, 1)
@@ -191,7 +191,7 @@ def test_transpile_mumbai_target(self):
         qc.h(0)
         qc.cx(1, 0)
         qc.measure_all()
-        tqc = transpile(qc, backend)
+        tqc = transpile(qc, backend, optimization_level=1)
         qr = QuantumRegister(27, "q")
         cr = ClassicalRegister(2, "meas")
         expected = QuantumCircuit(qr, cr, global_phase=math.pi / 4)
diff --git a/test/python/pulse/test_builder.py b/test/python/pulse/test_builder.py
index cf029d5d98c2..1dc295a02be1 100644
--- a/test/python/pulse/test_builder.py
+++ b/test/python/pulse/test_builder.py
@@ -764,7 +764,9 @@ def get_sched(qubit_idx: [int], backend):
             qc = circuit.QuantumCircuit(2)
             for idx in qubit_idx:
                 qc.append(circuit.library.U2Gate(0, pi / 2), [idx])
-            return compiler.schedule(compiler.transpile(qc, backend=backend), backend)
+            return compiler.schedule(
+                compiler.transpile(qc, backend=backend, optimization_level=1), backend
+            )
 
         with pulse.build(self.backend) as schedule:
             with pulse.align_sequential():
@@ -784,7 +786,7 @@ def get_sched(qubit_idx: [int], backend):
         # prepare and schedule circuits that will be used.
         single_u2_qc = circuit.QuantumCircuit(2)
         single_u2_qc.append(circuit.library.U2Gate(0, pi / 2), [1])
-        single_u2_qc = compiler.transpile(single_u2_qc, self.backend)
+        single_u2_qc = compiler.transpile(single_u2_qc, self.backend, optimization_level=1)
         single_u2_sched = compiler.schedule(single_u2_qc, self.backend)
 
         # sequential context
@@ -809,7 +811,7 @@ def get_sched(qubit_idx: [int], backend):
         triple_u2_qc.append(circuit.library.U2Gate(0, pi / 2), [0])
         triple_u2_qc.append(circuit.library.U2Gate(0, pi / 2), [1])
         triple_u2_qc.append(circuit.library.U2Gate(0, pi / 2), [0])
-        triple_u2_qc = compiler.transpile(triple_u2_qc, self.backend)
+        triple_u2_qc = compiler.transpile(triple_u2_qc, self.backend, optimization_level=1)
         align_left_reference = compiler.schedule(triple_u2_qc, self.backend, method="alap")
 
         # measurement
diff --git a/test/python/transpiler/test_basis_translator.py b/test/python/transpiler/test_basis_translator.py
index e1c8063a4575..9dae6c3f283a 100644
--- a/test/python/transpiler/test_basis_translator.py
+++ b/test/python/transpiler/test_basis_translator.py
@@ -1106,6 +1106,7 @@ def test_skip_target_basis_equivalences_1(self):
             circ,
             basis_gates=["id", "rz", "sx", "x", "cx"],
             seed_transpiler=42,
+            optimization_level=1,
         )
         self.assertEqual(circ_transpiled.count_ops(), {"cx": 91, "rz": 66, "sx": 22})
 
diff --git a/test/python/transpiler/test_high_level_synthesis.py b/test/python/transpiler/test_high_level_synthesis.py
index fd6ae6a01cda..d1ea21cde544 100644
--- a/test/python/transpiler/test_high_level_synthesis.py
+++ b/test/python/transpiler/test_high_level_synthesis.py
@@ -2118,11 +2118,9 @@ def test_qft_plugins_qft(self, qft_plugin_name):
         qc.cx(1, 3)
         qc.append(QFTGate(3).inverse(), [0, 1, 2])
         hls_config = HLSConfig(qft=[qft_plugin_name])
-        basis_gates = ["cx", "u"]
-        qct = transpile(qc, hls_config=hls_config, basis_gates=basis_gates)
+        hls_pass = HighLevelSynthesis(hls_config=hls_config)
+        qct = hls_pass(qc)
         self.assertEqual(Operator(qc), Operator(qct))
-        ops = set(qct.count_ops().keys())
-        self.assertEqual(ops, {"u", "cx"})
 
     @data("line", "full")
     def test_qft_line_plugin_annotated_qft(self, qft_plugin_name):
@@ -2130,11 +2128,9 @@ def test_qft_line_plugin_annotated_qft(self, qft_plugin_name):
         qc = QuantumCircuit(4)
         qc.append(QFTGate(3).inverse(annotated=True).control(annotated=True), [0, 1, 2, 3])
         hls_config = HLSConfig(qft=[qft_plugin_name])
-        basis_gates = ["cx", "u"]
-        qct = transpile(qc, hls_config=hls_config, basis_gates=basis_gates)
+        hls_pass = HighLevelSynthesis(hls_config=hls_config)
+        qct = hls_pass(qc)
         self.assertEqual(Operator(qc), Operator(qct))
-        ops = set(qct.count_ops().keys())
-        self.assertEqual(ops, {"u", "cx"})
 
 
 if __name__ == "__main__":
diff --git a/test/python/transpiler/test_preset_passmanagers.py b/test/python/transpiler/test_preset_passmanagers.py
index 32d39304b44e..949d754573c5 100644
--- a/test/python/transpiler/test_preset_passmanagers.py
+++ b/test/python/transpiler/test_preset_passmanagers.py
@@ -1219,6 +1219,24 @@ def test_with_backend(self, optimization_level):
         pm = generate_preset_pass_manager(optimization_level, target)
         self.assertIsInstance(pm, PassManager)
 
+    def test_default_optimization_level(self):
+        """Test a pass manager is constructed with no optimization level."""
+        backend = GenericBackendV2(num_qubits=14, coupling_map=MELBOURNE_CMAP)
+        pm = generate_preset_pass_manager(backend=backend)
+        self.assertIsInstance(pm, PassManager)
+
+    def test_default_optimization_level_backend_first_pos_arg(self):
+        """Test a pass manager is constructed with only a positional backend."""
+        backend = GenericBackendV2(num_qubits=14, coupling_map=MELBOURNE_CMAP)
+        pm = generate_preset_pass_manager(backend)
+        self.assertIsInstance(pm, PassManager)
+
+    def test_default_optimization_level_target_first_pos_arg(self):
+        """Test a pass manager is constructed with only a positional target."""
+        backend = GenericBackendV2(num_qubits=14, coupling_map=MELBOURNE_CMAP)
+        pm = generate_preset_pass_manager(backend.target)
+        self.assertIsInstance(pm, PassManager)
+
     @data(0, 1, 2, 3)
     def test_with_no_backend(self, optimization_level):
         """Test a passmanager is constructed with no backend and optimization level."""
diff --git a/test/python/transpiler/test_sabre_layout.py b/test/python/transpiler/test_sabre_layout.py
index 0a7b977162a3..4c09bf12efa8 100644
--- a/test/python/transpiler/test_sabre_layout.py
+++ b/test/python/transpiler/test_sabre_layout.py
@@ -195,7 +195,9 @@ def test_layout_with_classical_bits(self):
 rz(0) q4835[1];
 """
         )
-        res = transpile(qc, Fake27QPulseV1(), layout_method="sabre", seed_transpiler=1234)
+        res = transpile(
+            qc, Fake27QPulseV1(), layout_method="sabre", seed_transpiler=1234, optimization_level=1
+        )
         self.assertIsInstance(res, QuantumCircuit)
         layout = res._layout.initial_layout
         self.assertEqual(
@@ -251,6 +253,7 @@ def test_layout_many_search_trials(self):
             layout_method="sabre",
             routing_method="stochastic",
             seed_transpiler=12345,
+            optimization_level=1,
         )
         self.assertIsInstance(res, QuantumCircuit)
         layout = res._layout.initial_layout