Oxygen homeostasis plays a critical role in angiogenesis, erythropoiesis and cell metabolism. Oxygen homeostasis is set by the hypoxia inducible factor-1α (HIF-1α) pathway, which is controlled by Factor Inhibiting HIF-1α (FIH). FIH is a non-heme Fe(II), α-ketoglutarate dependent dioxygenase that inhibits HIF-1α by hydroxylating the C-terminal transactivation domain (CTAD) of HIF-1α at HIF-Asn803. A tight coupling between CTAD binding and O2-activation is essential for hypoxia sensing, making changes in the coordination geometry of Fe(II) upon CTAD encounter a crucial feature of this enzyme. Although the consensus chemical mechanism for FIH proposes that CTAD binding triggers O2-activation by causing the Fe(II) cofactor to release an aquo ligand, experimental evidence of this point has been absent. More broadly, this proposed coordination change at Fe(II) has not been observed during steady-state turnover in any αKG oxygenase to date. In this manuscript, solvent isotope effects (SIEs) were used as a direct mechanistic probe of substrate triggered aquo release in FIH, as inverse SIEs (SIE < 1) are signatures for pre-equilibrium aquo release from metal ions. Our mechanistic studies of FIH have revealed inverse solvent isotope effects in the steady-state rate constants at limiting concentrations of CTAD or αKG: D2Okcat/KM(CTAD) = 0.40 ± 0.07, D2Okcat/KM(αKG) = 0.32 ± 0.08, providing direct evidence for aquo release during steady-state turnover. Furthermore, the SIE at saturating concentrations of CTAD and αKG was inverse, D2Okcat = 0.51 ± 0.07, indicating that aquo release occurs after CTAD binds. The inverse kinetic SIEs observed in the steady state for FIH can be explained by a strong Fe-OH2 bond. The stable Fe-OH2 bond plays an important part in FIH’s regulatory role over O2 homeostasis in humans, and points toward a strategy for tightly coupling O2-activation with CTAD hydroxylation that relies on substrate triggering.