Recently, work on the mechanism of action of the von Hippel–Lindau tumour suppressor protein (pVHL) and studies on hypoxic gene regulation have converged, providing insights into both cellular oxygen sensing and cancer pathogenesis. pVHL is the recognition component of the E3-ubiquitin ligase complex involved in the degradation of hypoxia-inducible factor-1 (HIF) α-subunits, a process regulated by oxygen availability and blocked by disease causing pVHL mutations. In normoxic cells, pVHL targeting of HIF-α subunits follows hydroxylation of critical HIF prolyl residues by a group of oxygen, 2-oxoglutarate- and iron-dependent enzymes. In this review, we outline current understanding of HIF/pVHL/prolyl hydroxylase pathway and consider the implications for VHL-associated cancer.