Hydroxylation is well-known as an essential protein modification which can influence protein function and stability. For example, the transcriptional activity of hypoxia-inducible factor (HIF) was shown to be suppressed by asparaginyl hydroxylation mediated by the enzyme Factor Inhibiting HIF-1 (FIH-1). In this case, hydroxylation inhibits interaction of the transcription factor with transcriptional co-activators such as p300/CBP which impairs the transactivation function. Apart from HIF-α, FIH-1-dependent hydroxylation has been demonstrated previously within a highly conserved protein interaction domain, termed the ankyrin repeat domain (ARD). However, the relevance of this protein modification remained elusive to date. In our study, we identified apoptosis-stimulating p53-binding protein 2 (ASPP2) as a new substrate of FIH-1 while inhibitory ASPP (iASPP), a closely related ARD protein, was not hydroxylated. The ASPP protein family members were initially identified as highly conserved regulators of the tumour suppressor p53 but very recently new cellular functions were revealed. ASPP2 was shown to be important for the regulation of cell polarity via interaction with partitioning defective 3 homolog (Par-3). Remarkably, we found an impaired ASPP2- Par-3 interaction upon FIH-1 depletion while neither apoptosis nor proliferation of the cancer cells or the interaction between ASPP2 and p53 were affected. For the first time, we demonstrate physiological effects of ARD hydroxylation mediated by FIH-1. Our data indicate that ARD hydroxylation can specifically modulate the protein interaction profile of FIH-1 substrates. The large cellular pool of ARD containing proteins implies effects on a broad range of cellular functions and signalling pathways.