Hypusine is a post-translational modification on eukaryotic translation initiation factor 5A (eIF5A). The last step in the biosynthesis of hypusine, deoxyhypusine hydroxylation, is an oxygen dependent reaction. Here we show that deletion of deoxyhypusine hydroxylase, Lia1, compromises yeast respiration through translation downregulation of proteins in respiration pathway. The translation suppression, due to the lack of deoxyhypusine hydroxylation, mainly affects the translation of the N-termini of the proteins, which is independent of the presence of proline residues, but likely dependent on the interaction between the N-terminal nascent peptide and the ribosomal peptidyl exiting tunnel. Proteomics and biochemical studies revealed that Lia1 deletion decreased the N-terminal translation of proteins involved in mitochondrial respiration, oxidative stress response, and heat shock response. Our work uncovers previously unknown functions of the hypusine modification by considering the substrate requirement of the post-translation modification, highlights the unique challenges of translating the N-termini of proteins and demonstrates a novel oxygen sensing mechanism in eukaryotic cells.