Protein inhibitor of activated STAT3 (PIAS3), a regulator of the JAK/STAT pathway, binds to and blocks the DNA-binding activity of signal transducer and activator of transcription 3 (STAT3). PIAS3 has the potential to be hydroxylated at a specific proline residue, in an amino acid sequence known to be involved in oxygen-dependent post-translational modification of certain proteins, and which may lead to ubiquitination and degradation by the proteasome under normoxia. Alternatively, hydroxylation may affect PIAS3 function, such as its inhibition of STAT3-DNA binding. PIAS3 protein expression was found to be stable regardless of oxygen concentration. However, PIAS3 function increased under hypoxic conditions. Mutation of a specific proline residue was observed to affect the function of PIAS3 in cell growth and proliferation. Protein-protein interactions with PIAS3 were found to change under hypoxic conditions. These results suggest the function of PIAS3 is altered under low oxygen conditions.