Catalyzes the post-translational formation of 4-hydroxyproline in hypoxia-inducible factor (HIF) alpha proteins. Hydroxylates HIF-1 alpha at 'Pro-564', and HIF-2 alpha. Functions as a cellular oxygen sensor and, under normoxic conditions, targets HIF through the hydroxylation for proteasomal degradation via the von Hippel-Lindau ubiquitination complex. May play a role in cell growth regulation in muscle cells and in apoptosis in neuronal tissue. Promotes cell death through a caspase-dependent mechanism.