We previously reported that Tibetan-specific variant of prolyl-hydroxylase-2 (PHD2)D4E;C127S protects highlanders from hypoxia-triggered pathologies by destabilizing hypoxia-inducible factor (HIF)-1α. Others have reported that stabilized HIF1α negatively regulates interferon (IFN)-regulating factor (IRF)-3 under hypoxia. We examined the role of PHD2D4E;C127S variant in IFN synthesis in immune cells during viral infections. Primary monocytes and cells engineered to express the PHD2D4E;C127S variant displayed protection against dengue virus (DENV)-2 infection by suppressing HIF1α, in turn promoting IRF-3 and IFNα/β synthesis in hypoxia (3% O2) in vitro. However, under normoxia (21% O2), these mutant cells increased reactive oxygen species (ROS) generation following DENV2 infection. Increased ROS then suppressed PHD2D4E;C127S activity, reflected by reduced hydroxylation and concomitant stabilization of HIF1α, resulting in suppressed IFN synthesis and higher DENV2 replication. The PHD2WT cells demonstrated the opposite trend. Our data further confirmed the inverse correlation between HIF1α and IFN pathways. CAY10585, a HIF1α-inhibitor, decreased the DENV2 infection by increasing IFN-A/B and IRF-3/7/9 expression. HIF1α-depleted monocytes also showed a similar response to the infection. We extended our findings to COVID-19 infection. The CD4/CD8 T-cells collected from Tibetans with PHD2D4E;C127S variant and exposed to SARS-CoV-2 infection showed elevated expression of IFN-γ in response to exposure to SARS-CoV-2 receptor-binding domain (RBD) peptide under hypoxia, and a lesser expression under normoxia. The study thus highlights a unique crosstalk of PHD2D4E;C127S variant with HIF1α-IFN axis under environmental pO2 in protecting or predisposing Tibetans to viral infections.