The molecular basis of the erythrocytosis group of red cell disorders is incompletely defined. Some cases are due to dysregulation of erythropoietin (Epo) synthesis. The hypoxia inducible transcription factor (HIF) tightly regulates Epo synthesis. HIF in turn is regulated through its alpha subunit, which under normoxic conditions is hydroxylated on specific prolines and targeted for degradation by the von Hippel Lindau (VHL) protein. Several mutations in VHL have been reported in erythrocytosis, but only 1 mutation in the HIF prolyl hydroxylase PHD2 (prolyl hydroxylase domain protein 2) has been described. Here, we report a novel PHD2 mutation, Arg371His, which causes decreased HIF binding, HIF hydroxylase, and HIF inhibitory activities. In the tertiary structure of PHD2, Arg371 lies close to the previously described Pro317Arg mutation site. These findings substantiate PHD2 as a critical enzyme controlling HIF and therefore Epo in humans, and furthermore suggest the location of an active site groove in PHD2 that binds HIF.