The prolyl 4-hydroxylase domain protein 3 (PHD3) belongs to 2-oxoglutarate and iron-dependent dioxygenases. Together with the two closest paralogues, PHD1 and PHD2, these enzymes have been identified as cellular oxygen sensors that can mark the hypoxiainducible factor α (HIF-α) for von Hippel-Lindau proteinmediated proteasomal destruction. Although having overlapping functions with PHD1 and PHD2, PHD3 markedly differs from the two isoforms. PHD3 shows a different expression pattern and subcellular localization as well as activity under low oxygen tension. Moreover, it has the widest range of non-HIF targets underlying its diverse functions. The functions of PHD3 differ depending on the cell type and also partially on the microenvironmental conditions it is expressed at. Under normoxia, PHD3 has been shown to be proapoptotic, but under hypoxia, it can have cell survival or proliferation-supporting functions. Here we discuss the regulation, targets, and functions of PHD3.