Oxygen is critically important to metazoan life, and the EGL-9/PHD enzymes are key regulators of hypoxia (low oxygen) response. When oxygen levels are high, the EGL-9/PHD proteins hydroxylate hypoxia-inducible factor (HIF) transcription factors. Once hydroxylated, HIFalpha subunits bind to von Hippel-Lindau (VHL) E3 ligases and are degraded. Prior genetic analyses in Caenorhabditis elegans had shown that EGL-9 also acted through a vhl-1-independent pathway to inhibit HIF-1 transcriptional activity. Here, we characterize this novel EGL-9 function. We employ an array of complementary methods to inhibit EGL-9 hydroxylase activity in vivo. These include hypoxia, hydroxylase inhibitors, mutation of the proline in HIF-1 that is normally modified by EGL-9, and mutation of the EGL-9 catalytic core. Remarkably, we find that each of these treatments or mutations eliminates oxygen-dependent degradation of HIF-1 protein, but none of them abolishes EGL-9-mediated repression of HIF-1 transcriptional activity. Further, analyses of new egl-9 alleles reveal that the evolutionarily conserved EGL-9 MYND zinc finger domain does not have a major role in HIF-1 regulation. We conclude that C. elegans EGL-9 is a bifunctional protein. In addition to its well-established role as the oxygen sensor that regulates HIF-1 protein levels, EGL-9 inhibits HIF-1 transcriptional activity via a pathway that has little or no requirement for hydroxylase activity or for the EGL-9 MYND domain.