The response of animals to hypoxia is mediated by the hypoxia‐inducible transcription factor. Human hypoxia‐inducible factor is regulated by four Fe(II)‐ and 2‐oxoglutarate‐dependent oxygenases: prolyl hydroxylase domain enzymes 1–3 catalyse hydroxylation of two prolyl‐residues in hypoxia‐inducible factor, triggering its degradation by the proteasome. Factor inhibiting hypoxia‐inducible factor catalyses the hydroxylation of an asparagine‐residue in hypoxia‐inducible factor, inhibiting its transcriptional activity. Collectively, the hypoxia‐inducible factor hydroxylases negatively regulate hypoxia‐inducible factor in response to increasing oxygen concentration. Prolyl hydroxylase domain 2 is the most important oxygen sensor in human cells; however, the underlying kinetic basis of the oxygen‐sensing function of prolyl hydroxylase domain 2 is unclear. We report analyses of the reaction of prolyl hydroxylase domain 2 with oxygen. Chemical quench/MS experiments demonstrate that reaction of a complex of prolyl hydroxylase domain 2, Fe(II), 2‐oxoglutarate and the C‐terminal oxygen‐dependent degradation domain of hypoxia‐inducible factor‐α with oxygen to form hydroxylated C‐terminal oxygen‐dependent degradation domain and succinate is much slower (approximately 100‐fold) than for other similarly studied 2‐oxoglutarate oxygenases. Stopped flow/UV‐visible spectroscopy experiments demonstrate that the reaction produces a relatively stable species absorbing at 320 nm; Mössbauer spectroscopic experiments indicate that this species is likely not a Fe(IV)=O intermediate, as observed for other 2‐oxoglutarate oxygenases. Overall, the results obtained suggest that, at least compared to other studied 2‐oxoglutarate oxygenases, prolyl hydroxylase domain 2 reacts relatively slowly with oxygen, a property that may be associated with its function as an oxygen sensor.