Hypoxia-inducible factor (HIF) is a master transcriptional regulator of hypoxia-inducible genes and consists of a labile α subunit (such as HIF1α) and a stable β subunit (such as HIF1β or ARNT). In the presence of oxygen, HIFα family members are hydroxylated on one of two conserved prolyl residues by members of the egg-laying-defective nine (EGLN) family. Prolyl hydroxylation generates a binding site for a ubiquitin ligase complex containing the von Hippel-Lindau (VHL) tumor suppressor protein, which results in HIFα destruction. In addition, the HIFα transcriptional activation function is modulated further by asparagine hydroxylation by FIH (factor-inhibiting HIF), which affects recruitment of the coactivators p300 and CBP. These findings provide new mechanistic insights into oxygen sensing by metazoans and are the first examples of protein hydroxylation being used in intracellular signaling. The existence of three human EGLN family members, as well as other putative hydroxylases, raises the possibility that this signal is used in other contexts by other proteins.