Prolyl 4-hydroxylases (PHDs; PHD1, PHD2, and PHD3) are a component of cellular oxygen sensors that regulate the adaptive response depending on the oxygen concentration stabilized by hypoxia/stress-regulated genes transcription. In normoxic condition, PHD2 is required to stabilize hypoxia inducible factors. Silencing of PHD2 leads to the activation of intracellular signaling including RhoA and Rho-associated protein kinase (ROCK), which are key regulators of neurite growth. In this study, we determined that genetic or pharmacological inhibition of PHD2 in cultured cortical neurons prevents neurite elongation through a ROCK-dependent mechanism. We then explored the role of PHDs in axonal reorganization following a traumatic brain injury in adult mice. Unilateral destruction of motor cortex resulted in behavioral deficits due to disruption of the corticospinal tract (CST), a part of the descending motor pathway. In the spinal cord, sprouting of fibers from the intact side of the CST into the denervated side is thought to contribute to the recovery process following an injury. Intracortical infusion of PHD inhibitors into the intact side of the motor cortex abrogated spontaneous formation of CST collaterals and functional recovery after damage to the sensorimotor cortex. These findings suggest PHDs have an important role in the formation of compensatory axonal networks following an injury and may represent a new molecular target for the central nervous system disorders.