Catalyzes the post-translational formation of 4-hydroxyproline in hypoxia-inducible factor (HIF) alpha proteins. Hydroxylates HIF1A at ‘Pro-402’ and ‘Pro-564’. May function as a cellular oxygen sensor and, under normoxic conditions, may target HIF through the hydroxylation for proteasomal degradation via the von Hippel-Lindau ubiquitination complex.