Hydroxylation of the amino acid proline by the enzyme prolyl hydroxylase forms hydroxyproline. Dear Vikram Kumar, this is another example of a post-translational modification.
There are more than 400 different types of PTMs affecting many aspects of protein functions. Major PTMs include phosphorylation, methylation, sulfation, acetylation, ubiquitylation, prenylation, myristoylation, SUMOylation, palmitoylation, and different types of glycosylation (N-glycosylation, O-glycosylation, C-glycosylation, and S-glycosylation), phosphoglycosylation and glycosylphosphatidylinositol (GPI anchored).