Hypoxia-inducible factor (HIF) is a transcriptional complex that mediates a broad range of cellular and systemic responses to hypoxia. Analysis of HIF-alpha subunits has demonstrated that its activity is regulated by a series of oxygen-dependent enzymatic hydroxylations at specific prolyl and asparaginyl residues. Combined structural/genetic approaches have identified the relevant enzymes as members of the 2-oxoglutarate-dependent dioxygenase superfamily, possessing a beta-barrel 'jelly-roll' conformation that aligns a 2-histidine/1-carboxylate iron co-ordination motif at the catalytic centre. HIF prolyl hydroxylation is performed by a closely related set of isoenzymes (PHD1-3) that differ in abundance and subcellular localisation. Hydroxylation of either human HIF-1alpha Pro402 or Pro564 promotes interaction with the von Hippel-Lindau tumour suppressor protein (pVHL). In oxygenated cells this process targets HIF-alpha for rapid proteasomal destruction. HIF asparaginyl hydroxylation is performed by a protein termed factor inhibiting HIF (FIH). In oxygenated cells hydroxylation of human HIF-1alpha Asn803 prevents interaction with the p300 transcriptional co-activator, providing a second mechanism by which HIF-mediated transcription is inactivated. Genetic studies demonstrate a critical function for both types of enzyme in regulating the HIF transcriptional cascade. Limitation of activity in hypoxia supports a central role of these hydroxylases in cellular oxygen sensing. Regulation of the amount of hydroxylase protein, and the supply of other co-substrates and co-factors, particularly the cellular availability of iron, also contribute to tuning the physiological response to hypoxia.