Histone post-translational modifications (PTMs) are important for regulating various DNA-templated processes. Here, we report the existence of a histone PTM in mammalian cells, namely histone H3 with hydroxylation of proline at residue 16 (H3P16oh), which is catalyzed by the proline hydroxylase EGLN2. We show that H3P16oh enhances direct binding of KDM5A to its substrate, histone H3 with trimethylation at the fourth lysine residue (H3K4me3), resulting in enhanced chromatin recruitment of KDM5A and a corresponding decrease of H3K4me3 at target genes. Genome- and transcriptome-wide analyses show that the EGLN2–KDM5A axis regulates target gene expression in mammalian cells. Specifically, our data demonstrate repression of the WNT pathway negative regulator DKK1 through the EGLN2-H3P16oh-KDM5A pathway to promote WNT/β-catenin signaling in triple-negative breast cancer (TNBC). This study characterizes a regulatory mark in the histone code and reveals a role for H3P16oh in regulating mammalian gene expression.