Knowledge continues to grow on the biology of endogenous erythropoietin (EPO), its effects on red blood cell physiology, and the use of the recombinant form of the hormone. In addition to oxygen delivery, oxygen consumption may be important in stimulating EPO production. This production is likely mediated by an intracellular messenger system other than cAMP. Once released, EPO prevents programmed cell death of BFU-E and CFU-E cells. Recent evidence suggests that lack of EPO, rather than the presence of EPO inhibitors, is the cause of the anemia seen in renal patients. Recombinant EPO has been available clinically since mid 1989. Nearly two thirds of dialysis patients are receiving this agent, although low doses are the rule, with the average hematocrit achieved of only 31%. EPO dosing has been subjected to kinetic modeling that has revealed a wide range in RBC half-life from patient to patient. This accounts in part for the varying maintenance dosing requirements. An additional modulating factor in the response to EPO is severe, secondary hyperparathyroidism with bone marrow fibrosis which may be reversible with medical or surgical parathyroidectomy. Hypertension continues to occur in 20-35% of patients given EPO. This effect may be mediated by endothelin which appears to be stimulated by EPO administration. Treatment of the anemia of renal failure leads to many organ system benefits including improved muscle metabolism, decreased left ventricular hypertrophy, enhanced immune responses to hepatitis vaccine, and improved brain electrophysiology. he optimal target hematocrit to achieve the greatest benefits for the patient at an acceptable cost remains to be determined.