Tumour hypoxia is a well-known microenvironmental factor that causes cancer progression and resistance to cancer treatment. This involves multiple mechanisms of which the best-understood ones are mediated through transcriptional gene activation by the hypoxia-inducible factors (HIFs). HIFs in turn are regulated in response to oxygen availability by a family of iron- and 2-oxoglutarate-dependent dioxygenases, the HIF prolyl hydroxylases (PHDs). PHDs inactivate HIFs in normoxia by activating degradation of the HIF-alpha subunit but release HIF activation in poorly oxygenated conditions. The function of HIF in tumours is fairly well characterized but our understanding on the outcome of PHDs in tumours is much more limited. Here we review the function of PHDs on the HIF system, the expression of PHDs in human tumours as well as their putative function in cancer. The PHDs may have either tumour promoting or suppressing activity. Their outcome in cancer depends on the cell and cancer type-specific expression and on the availability of diverse natural PHD inhibitors in tumours. Moreover, besides the action of PHDs on HIF, recent data suggest PHD function in non-HIF signalling. Together the data illustrate a complex operation of the oxygen sensors in cancer.