We describe computational studies of the mode of action of the prolyl hydroxylase domain containing protein (PHD2). Long-term molecular dynamics (MD) simulations were performed to investigate the rigidity of the crystallographically observed conformations of PHD2 in solution. We also describe the influence of the C-terminal oxygen-dependent degradation domain (CODD) of hypoxia inducible factor 1α (HIF-1α) on the overall behaviour of the protein, including the effect of the natural ligand 2-oxoglutarate (2OG) and an isoquinoline inhibitor. To study the geometry of the 2-His-1-carboxylate facial triad and its dependency on the protein environment, we performed DFT calculations on model systems and compared them with quantum mechanics/molecular mechanics (QM/MM) gas-phase energy minimisations, which allowed us to treat the whole protein. The combination of these methods provides insight into the behaviour of the 2-His-1-carboxylate facial triad with 2OG and an inhibitor of PHD2 on the atomistic scale.