Anemia (hematocrit less than 25%) predictably accompanies chronic renal failure and is present in over 90% of patients on chronic dialysis. Relative erythropoietin deficiency is the proximate cause. Recombinant human erythropoietin recently became available for research and clinical use. Erythropoietin production is regulated by a single copy gene located on chromosome 7; its expression has been shown in the kidney, liver, and macrophages. It is glycosylated protein of 166 amino acids with a molecular weight of 34,000 D. When given to patients with the anemia of renal failure, erythropoietin causes a dose-dependent rise in hematocrit to the normal range within 8 to 14 weeks. Complications of this response are minimal except for a significant incidence of hypertension. When the anemia is corrected, the patient's quality of life, cognitive function, and brain electrophysiology improve dramatically. Recombinant human erythropoietin represents a major breakthrough in the treatment of patients with chronic renal failure. Current reimbursement constraints limit its full application.