The hypoxia-inducible factors (HIFs) 1alpha and 2alpha are key mammalian transcription factors that exhibit dramatic increases in both protein stability and intrinsic transcriptional potency during low-oxygen stress. This increased stability is due to the absence of proline hydroxylation, which in normoxia promotes binding of HIF to the von Hippel-Lindau (VHL tumor suppressor) ubiquitin ligase. We now show that hypoxic induction of the COOH-terminal transactivation domain (CAD) of HIF occurs through abrogation of hydroxylation of a conserved asparagine in the CAD. Inhibitors of Fe(II)- and 2-oxoglutarate-dependent dioxygenases prevented hydroxylation of the Asn, thus allowing the CAD to interact with the p300 transcription coactivator. Replacement of the conserved Asn by Ala resulted in constitutive p300 interaction and strong transcriptional activity. Full induction of HIF-1alpha and -2alpha, therefore, relies on the abrogation of both Pro and Asn hydroxylation, which during normoxia occur at the degradation and COOH-terminal transactivation domains, respectively.