The Prolyl hydroxylase 1 (EGLN2) is known to affect tumorigenesis by regulating the degradation of hypoxia-inducible factor. Polymorphisms in EGLN2 may facilitate cancer cell survival under hypoxic conditions and directly associate with cancer susceptibility. Here, we examined the contribution of a 4-bp insertion/deletion polymorphism (rs10680577) within the distal promoter of EGLN2 to the risk of hepatocelluar carcinoma (HCC) in Chinese populations. The contribution of rs10680577 to HCC risk was investigated in 623 HCC cases and 1,242 controls and replicated in an independent case–control study consisting of 444 HCC cases and 450 controls. Logistic regression analysis showed that the deletion allele of rs10680577 was significantly associated with increased risk for HCC occurrence in both case–control studies [OR = 1.40; 95% confidence interval (CI) = 1.18–1.66, P < 0.0001; OR = 1.49; 95% CI = 1.18–1.88, P = 0.0007]. Such positive association was more pronounced in current smokers (OR = 3.49, 95% CI = 2.24–5.45) than nonsmokers (OR = 1.24, 95% CI = 1.03–1.50; heterogeneity P = 0.0002). Genotype–phenotype correlation studies showed that the deletion allele was significantly correlated with higher expression of both EGLN2 and RERT-lncRNA [a long noncoding RNA whose sequence overlaps with Ras-related GTP-binding protein 4b (RAB4B) and EGLN2)] in vivo and in vitro. Furthermore, RERT-lncRNA expression was also significantly correlated with EGLN2 expression in vivo, consistent with in vitro gain-of-function study that showed overexpressing RERT-lncRNA upregulated EGLN2. Finally, in silico prediction suggested that the insertion allele could disrupt the structure of RERT-lncRNA. Taken together, our findings provided strong evidence for the hypothesis that rs10680577 contributes to hepatocarcinogenesis, possibly by affecting RERT-lncRNA structure and subsequently EGLN2 expression, making it a promising biomarker for early diagnosis of HCC. Cancer Res; 72(23); 6163–72. ©2012 AACR.