The words קודש לי-ה-ו-ה – holy to Hashem - were engraved on the Tzitz. According to one opinion, the two words were written on one line, however the Halacha follows the opinion that the words were written over two lines; קודש ל – holy to – on the bottom and the Name י-ה-ו-ה (Havayah) above.
To be “holy to” represents our efforts to become holy to Hashem through Torah study, prayer and keeping of Mitzvos. In Kabbalah, this personal effort to lift ourselves upwards is referred to as Isarusa D’lesata, an awakening from below.
Our Isarusa D’lesata elicits a flow of G-dly energy, light and blessing from Above. This is referred to as Isarusa D’Leila, an awakening from Above. It is represented by the Divine Name, whose letters represent the process by which G-dly revelation flows into our world.
The view that Kodesh LaHashem was written on the same line, refers to an Isarusa D’leila that can be reached and accessed by our Isarusa D’lesata. This is the flow from Above that is caused by and directly commensurate with our personal efforts below.
But there is a higher level of Isarusa D’leila. This revelation comes from a level of G-dliness that far transcends the worlds and cannot be accessed or ‘caused’ through our actions. Our actions are merely the catalyst for this gift from Hashem. When we serve Hashem with the best of our (limited) abilities below, He rewards us with this infinite revelation.
The two levels of Isarusa D’leila correspond to two levels of the name י-ה-ו-ה discussed in Kabbalah. This is alluded to in the Torah by the two names Havayah Havayah written before the 13 Attributes of Mercy. These two names are separated by a Pesik (vertical line), illustrating how the higher Havayah is completely beyond.
The lower Havayah is the Name that is within the framework of the worlds. This is the Havayah that is “inline” with our actions to become “holy to”. As a gift, Hashem then rewards us with the supernal Havayah, the essential Name of Hashem that proceeded Creation, which sits above and beyond our actions.
~ Based on Or Hatorah Parshas Tetzaveh p1734
 Talmud Shabbos 63b
 Mishneh Torah laws of the Temple vessels 9:1-2