Animals require an immediate response to oxygen availability to allow rapid shifts between oxidative and glycolytic metabolism. These metabolic shifts are highly regulated by the HIF transcription factor. The factor inhibiting HIF (FIH) is an asparaginyl hydroxylase that controls HIF transcriptional activity in an oxygen-dependent manner. We show here that FIH loss increases oxidative metabolism, while also increasing glycolytic capacity, and that this gives rise to an increase in oxygen consumption. We further show that the loss of FIH acts to accelerate the cellular metabolic response to hypoxia. Skeletal muscle expresses 50-fold higher levels of FIH than other tissues: we analyzed skeletal muscle FIH mutants and found a decreased metabolic efficiency, correlated with an increased oxidative rate and an increased rate of hypoxic response. We find that FIH, through its regulation of oxidation, acts in concert with the PHD/vHL pathway to accelerate HIF-mediated metabolic responses to hypoxia.