Under normoxic conditions the hypoxia-inducible factor-1alpha (HIF-1alpha) protein is targeted for degradation by the von Hippel-Lindau (pVHL) tumor suppressor protein acting as an E3 ubiquitin ligase. Binding of pVHL to HIF-1alpha is dependent on hydroxylation of specific proline residues by O(2)-dependent prolyl 4-hydroxylases. Upon exposure to hypoxia the hydroxylase activity is inhibited, resulting in stabilization of HIF-1alpha protein levels and activation of transcription of target genes. One of the two critical proline residues, Pro(563) in mouse HIF-1alpha, is located within a bifunctional domain, the N-terminal transactivation domain (N-TAD), which mediates both pVHL-dependent degradation at normoxia and transcriptional activation at hypoxia. Here we have identified two N-TAD residues, Tyr(564) and Ile(565), which, in addition to Pro(563), were critical for pVHL-mediated degradation at normoxia. We have also identified D568A/D569A/D570A, F571A, and L573A as mutations of the N-TAD that abrogated binding to pVHL both in vitro and in vivo, and constitutively stabilized N-TAD against degradation. Moreover, the mutations Y564G, L556A/L558A, and F571A/L573A drastically reduced the transactivation function of either the isolated N-TAD or full-length HIF-1alpha in hypoxic cells. Interestingly, the P563A mutant exhibited a constitutively active and potent transactivation function that was enhanced by functional interaction with the transcriptional coactivator protein CREB-binding protein. In conclusion, we have identified by mutation analysis several residues that are critical for either one or both of the interdigitated and conditionally regulated degradation and transactivation functions of the N-TAD of HIF-1alpha.