The prolyl hydroxylase domain proteins (PHDs) catalyse the post-translational hydroxylation of the hypoxia-inducible factor (HIF), a modification that regulates the hypoxic response in humans. The PHDs are Fe(II)/2-oxoglutarate (2OG) oxygenases; their catalysis is proposed to provide a link between cellular HIF levels and changes in O2 availability. Transient kinetic studies have shown that purified PHD2 reacts slowly with O2 compared with some other studied 2OG oxygenases, a property which may be related to its hypoxia-sensing role. PHD2 forms a stable complex with Fe(II) and 2OG; crystallographic and kinetic analyses indicate that an Fe(II)-co-ordinated water molecule, which must be displaced before O2 binding, is relatively stable in the active site of PHD2. We used active site substitutions to investigate whether these properties are related to the slow reaction of PHD2 with O2. While disruption of 2OG binding in a R383K variant did not accelerate O2 activation, we found that substitution of the Fe(II)-binding aspartate for a glutamate residue (D315E) manifested significantly reduced Fe(II) binding, yet maintained catalytic activity with a 5-fold faster reaction with O2. The results inform on how the precise active site environment of oxygenases can affect rates of O2 activation and provide insights into limiting steps in PHD catalysis.