The structure and function of the 2-oxoglutarate binding site of prolyl 4-hydroxylase was studied by assaying the inhibitory potential of 24 selected aliphatic or aromatic compounds. All except one of them inhibited the enzyme competitively with respect to 2-oxoglutarate and noncompetitively with respect to Fe2+, the Ki values ranging from 0.8 microM to over 15 mM. The Ki values for the two most effective inhibitors, pyridine 2,5-dicarboxylate and 2,4-dicarboxylate, were about 0.8 microM and 2 microM, these compounds being the most potent inhibitors of prolyl 4-hydroxylase with respect to 2-oxoglutarate known so far. Only one of the compounds tested, 2-oxoadipinate, was able to support hydroxylation by replacing 2-oxoglutarate as a cosubstrate. The data suggest that the 2-oxoglutarate binding site can be divided into three distinct subsites. Subsite I is probably a positively charged side chain of the enzyme that ionically binds the C5 carboxyl group of the 2-oxoglutarate, subsite II consists of two cis-positioned equatorial coordination sites of the enzyme-bound ferrous ion and is chelated by the C1-C2 moiety, while subsite III involves a hydrophobic binding site in the C3-C4 region of the cosubstrate. The sp3 rehybridization of C2 within the chelating moiety of the cosubstrate appears to be a crucial event during decarboxylation that proceeds in the form of a ligand reaction inside the Fe2+ coordination sphere.