Erythropoietin is a glycoprotein hormone that plays a vital role in erythropoiesis. It is mainly produced in the fetal liver till the third trimester of pregnancy. At that point, the kidney interstitium takes over this function and becomes the main source of erythropoietin. Hypoxia stimulates erythropoietin production by a mechanism that may require a heme protein as a second messenger. Erythropoietin stimulates the maturation of erythroid precursors (colony-forming unit-erythroid and burst-forming unit-erythroid) via at least two types of cell surface receptors. The higher-affinity receptors appear to be more important in modulating the effects of erythropoietin in vivo. Changes in intracellular calcium may ultimately mediate the action of erythropoietin on erythroid precursors. A specific and sensitive radioimmunoassay is now available for accurately measuring erythropoietin levels. All forms of erythrocytosis except polycythemia vera are associated with elevated erythropoietin levels. Levels are also high in cord blood obtained following fetal asphyxia. Reduced levels are seen in patients with anemia due to renal diseases. The response of erythropoietin to the degree of anemia appears to be attenuated in patients with cancer, chronic diseases, and human immunodeficiency virus (HIV) infection. Erythropoietin has been successfully used for treating patients with anemia due to renal failure. Its use has also been approved for the treatment of anemia patients receiving zidovudine for HIV infection. Encouraging results have been observed when erythropoietin was used to treat anemia due to rheumatoid arthritis, hematological malignancies, and prematurity. It has also been used to increase the yield of autologous blood collected prior to an elective surgical procedure. However, it has not proved to be useful in sickle cell anemia and myelodysplastic syndromes.