Factor inhibiting HIF (FIH) is a cellular O2-sensing enzyme, which hydroxylates the hypoxia inducible factor-1α. Previously reported inverse solvent kinetic isotope effects indicated that FIH limits its overall turnover through an O2 activation step (Hangasky J. A., Saban E., and Knapp M. J. (2013) Biochemistry 52, 1594−1602). Here we characterize the rate-limiting step for O2 activation by FIH using a suite of mechanistic probes on the second order rate constant kcat/KM(O2). Steady-state kinetics showed that the rate constant for O2 activation was slow (kcat/KM(O2)app = 3500 M–1 s–1) compared with other non-heme iron oxygenases, and solvent viscosity assays further excluded diffusional encounter with O2 from being rate limiting on kcat/KM(O2). Competitive oxygen-18 kinetic isotope effect measurements (18kcat/KM(O2) = 1.0114(5)) indicated that the transition state for O2 activation resembled a cyclic peroxohemiketal, which precedes the formation of the ferryl intermediate observed in related enzymes. We interpret this data to indicate that FIH limits its overall activity at the point of the nucleophilic attack of Fe-bound O2— on the C-2 carbon of αKG. Overall, these results show that FIH follows the consensus mechanism for αKG oxygenases, suggesting that FIH may be an ideal enzyme to directly access steps involved in O2 activation among the broad family of αKG oxygenases.