The chronic response of animals to hypoxia is mediated by the αβ-heterodimeric hypoxia-inducible transcription factors (α,β-HIFs) which upregulate the expression of sets of genes that work to ameliorate the effects of limiting dioxygen. The HIF prolyl hydroxylase domain enzymes (PHDs) are Fe(II)- and 2-oxoglutarate-dependent oxygenases that act as hypoxia-sensing components of the HIF system: prolyl-hydroxylation signals for dioxgen availability-dependent HIF-α degradation via the ubiquitin proteasome system. The unusual kinetic properties of the PHDs, in particular a high Km for dioxygen and slow reaction with dioxygen, are proposed to enable their hypoxia-sensing role. An understanding of how dioxygen is delivered to, and binds at, the active site of the PHDs is important for the development of a chemical understanding of the hypoxic response. We employed a combined multiscale approach involving classical atomistic equilibrium and nonequilibrium MD simulations combined with QM/MM trajectories to investigate dioxygen diffusion to, and binding at, the active site in the PHD2.Fe(II).2OG.HIF substrate complex; PHD2 is the most important of the three human PHDs. The transport of dioxygen to the active site is described; dioxygen transport follows a single well-defined hydrophobic tunnel, formed from both enzyme and substrate elements to reach the PHD2 active site. The results provide estimates for rate constants that define a diffusion-reaction model for dioxygen:PHD2 interactions; in combination with reported biophysical analyses they provide chemical insight into the basis of the slow reaction of PHD2 with dioxygen. They imply that the reversible binding of dioxygen is central to the hypoxia-sensing capacity of the PHDs and that different PHD HIF-α substrate combinations might have different dioxygen sensitivity profiles. The extent of HIF-α substrate prolyl hydroxylation, which signals for subsequent HIF-α degradation, may thus be a manifestation of the equilibrium between dioxygen in bulk solution and dioxygen bound to the PHD2.Fe.2OG.HIF-α substrate complex.