In animals, the post-translational hydroxylation of hypoxia inducible factor (HIF) is a central mechanism for regulating gene expression in an oxygen-dependent manner. The oxygenase-catalyzed trans-4-prolyl hydroxylation of HIF-alpha increases its affinity for the von Hippel Lindau protein elongin B/C (VCB) ubiquitin ligase complex, leading to HIF-alpha degradation. The level of binding of HIF-alpha to VCB is increased by approximately 1000-fold upon addition of a single oxygen atom to a conserved proline residue. Here, we describe computational studies on the chemical basis of this "switchlike" signaling event. The results support crystallographic analyses showing the importance of hydrogen bonding in the binding of hydroxylated HIF-alpha to VCB and suggest that trans 4-hydroxylation "preorganizes" the proline residue to adopt the C(4)-exo conformation, via operation of the stereoelectronic gauche effect.