Hypoxia-inducible factor (HIF) is an oxygen-sensitive dimeric transcription factor that responds to pathophysiologically low O2 tensions via up-regulation, which leads to an orchestrated biological response to hypoxia. The HIF prolyl hydroxylase domain (PHD) enzymes are non-heme, iron-containing dioxygenases requiring for activity both molecular oxygen and 2-oxoglutarate that, under normoxia, selectively hydroxylate proline residues of HIF, initiating proteosomal degradation of the latter. The dependence of HIF protein levels on the concentration of O2 present, mediated by the PHD enzymes, forms the basis for one of the most significant biological sensor systems of tissue oxygenation in response to ischemic and inflammatory events. Consequently, pharmacological inhibition of PHD enzymes, leading to stabilization of HIF, may be of considerable therapeutic potential in treating conditions of tissue stress and injury. This Perspective reviews the PHDs and small molecule drug discovery efforts. A critical view of this challenging field is offered, which addresses potential concerns and highlights exciting possibilities for the future.