In the CNS, neurones are highly sensitive to the availability of oxygen. In conditions where oxygen availability is decreased, neuronal function can be altered, leading to injury and cell death. Hypoxia has been implicated in a number of central nervous system pathologies including stroke, head trauma and neurodegenerative diseases. Cellular responses to oxygen deprivation are complex and result in activation of short- and long-term mechanisms to conserve energy and protect cells. Failure of synaptic transmission can be observed within minutes following this hypoxia. The acute effects of hypoxia on synaptic transmission are primarily mediated by altering ion fluxes across membranes, pre-synaptic effects of adenosine and other actions at glutamatergic receptors. A more long-term feature of the response of neurones to hypoxia is the activation of transcription factors such as hypoxia-inducible factor. The activation of hypoxia-inducible factor is governed by a family of dioxygenases called hypoxia-inducible factor prolyl 4 hydroxylases (PHDs). Under hypoxic conditions, PHD activity is inhibited, thereby allowing hypoxia-inducible factor to accumulate and translocate to the nucleus, where it binds to the hypoxia-responsive element sequences of target gene promoters. Inhibition of PHD activity stabilizes hypoxia-inducible factor and other proteins thus acting as a neuroprotective agent. This review will focus on the response of neuronal cells to hypoxia-inducible factor and its targets, including the prolyl hydroxylases. We also present evidence for acute effects of PHD inhibition on synaptic transmission and plasticity in the hippocampus.