Hypoxia Inducible Factor-1 is a metazoan heterodimeric transcription factor that senses changes in O2 levels. HIF-1α subunit abundance is post-translationally regulated by prolyl-hydroxylase domain enzymes (PHDs), which use molecular O2 and α-ketoglutarate to hydroxylate two prolyl-residues in HIF-1α. Three PHDs have been identified and PHD2 is the most critical regulator of HIF-1α. HIF-1α can also be activated independently of hypoxia and in some cases this is due to changes in PHD2 abundance through poorly understood mechanisms. Previously, we reported that under O2-replete conditions that the intracellular parasite Toxoplasma gondii activates HIF-1 by reducing PHD2 protein abundance. Here, we demonstrate that Toxoplasma regulates PHD2 through a multistep process. First, PHD2 is a nucleocytoplasmic protein and Toxoplasma induces PHD2 cytoplasmic accumulation to separate it from nuclear HIF-1α. PHD2 is then degraded by lysosomes independently of the major autophagic processes, macroautophagy or chaperone-mediated autophagy. Rather, PHD2 interacts with the major lysosomal membrane protein, LAMP1, which is required for HIF-1 activation. These data therefore highlight for the first time that cytoplasmic trapping and subsequent lysosomal degradation of a host nucleocytoplasmic protein is a mechanism used by a microbial pathogen to regulate host gene expression.