Oxygen-dependent hydroxylation of hypoxia-inducible factor (HIF)-α subunits by prolyl hydroxylase domain (PHD) proteins signals their polyubiquitination and proteasomal degradation, and plays a critical role in regulating HIF abundance and oxygen homeostasis. While oxygen concentration plays a major role in determining the efficiency of PHD-catalyzed hydroxylation reactions, many other environmental and intracellular factors also significantly modulate PHD activities. In addition, PHDs may also employ hydroxylase-independent mechanisms to modify HIF activity. Interestingly, while PHDs regulate HIF-α protein stability, PHD2 and PHD3 themselves are subject to feedback upregulation by HIFs. Functionally, different PHD isoforms may differentially contribute to specific pathophysiological processes, including angiogenesis, erythropoiesis, tumorigenesis, and cell growth, differentiation and survival. Because of diverse roles of PHDs in many different processes, loss of PHD expression or function triggers multi-faceted pathophysiological changes as has been shown in mice lacking different PHD isoforms. Future investigations are needed to explore in vivo specificity of PHDs over different HIF-α subunits and differential roles of PHD isoforms in different biological processes.