Hypoxia contributes to the pathogenesis of various human diseases, including pulmonary artery hypertension (PAH), stroke, myocardial or cerebral infarction, and cancer. For example, acute hypoxia causes selective pulmonary artery (PA) constriction and elevation of pulmonary artery pressure. Chronic hypoxia induces structural and functional changes to the pulmonary vasculature, which resembles the phenotype of human PAH and is commonly used as an animal model of this disease. The mechanisms that lead to hypoxia-induced phenotypic changes have not been fully elucidated. Here, we show that hypoxia increases type I collagen prolyl-4-hydroxylase [C-P4H(I)], which leads to prolyl-hydroxylation and accumulation of Argonaute2 (Ago2), a critical component of the RNA-induced silencing complex (RISC). Hydroxylation of Ago2 is required for the association of Ago2 with heat shock protein 90 (Hsp90), which is necessary for the loading of microRNAs (miRNAs) into the RISC, and translocation to stress granules (SGs). We demonstrate that hydroxylation of Ago2 increases the level of miRNAs and increases the endonuclease activity of Ago2. In summary, this study identifies hypoxia as a mediator of the miRNA-dependent gene silencing pathway through posttranslational modification of Ago2, which might be responsible for cell survival or pathological responses under low oxygen stress.