Studies of the regulation of erythropoietin (EPO) production by the liver and kidneys, one of the classical physiological responses to hypoxia, led to the discovery of human oxygen-sensing mechanisms, which are now being targeted therapeutically. The oxygen-sensitive signal is generated by 2-oxoglutarate-dependent dioxygenases that deploy molecular oxygen as a co-substrate to catalyse the post-translational hydroxylation of specific prolyl and asparaginyl residues in hypoxia-inducible factor (HIF), a key transcription factor that regulates transcriptional responses to hypoxia. Hydroxylation of HIF at different sites promotes both its degradation and inactivation. Under hypoxic conditions, these processes are suppressed, enabling HIF to escape destruction and form active transcriptional complexes at thousands of loci across the human genome. Accordingly, HIF prolyl hydroxylase inhibitors stabilize HIF and stimulate expression of HIF target genes, including the EPO gene. These molecules activate endogenous EPO gene expression in diseased kidneys and are being developed, or are already in clinical use, for the treatment of renal anaemia. In this Review, we summarize information on the molecular circuitry of hypoxia signalling pathways underlying these new treatments and highlight some of the outstanding questions relevant to their clinical use.