Hypoxic stress is one of the major selective pressures in the microenvironment of solid tumors, and overcoming this restriction is essential for tumor progression. One of the key factors driving the cellular response to lack of oxygen is hypoxia inducible factor (HIF), a key transcriptional factor. The level of the α subunit of HIF-1 is regulated by rapid degradation that is controlled by a family of prolyl hydroxylases (PHDs/EGLNs), the activity of which depends on oxygen availability. Our study shows that ectopic expression of mPHD1 suppressed accumulation of HIF-1α and secretion of Vascular Endothelial Growth Factor after treatment of cells with a hypoxia-mimetic drug. Furthermore, when colon carcinoma cells expressing mPHD1 were injected into nude mice, tumor growth was inhibited, and the inhibition of tumor growth was correlated with increased necrosis and a striking decrease in microvessel density. These data demonstrate that inhibition of hypoxia-induced activation of HIF-1α through activation of HIF-hydroxylase can provide a novel therapeutic strategy for inhibition of tumor growth and neovascularization and support the development of gene transfer approaches based on the activation of HIF-prolyl hydroxylases.