Normochromic normocytic anemia regularly develops in chronic renal failure when the glomerular filtration rate drops below 20-30 ml/min. The reasons include: 1) a moderately reduced red cell life span, 2) blood loss, and 3) an inadequate increase in erythropoiesis relative to the fall in hemoglobin (Hb). The life-span of red blood cells may be shortened by their reduced resistance to mechanical, osmotic or oxidative stress, as well as by extracorpuscular factors. Blood loss results from dialysis, diagnostic sampling and, in particular, occult gastrointestinal bleeding. The predominant cause of inadequate erythropoiesis is a failure to increase erythropoietin (EPO) production in response to the developing anemia. Experience with recombinant EPO has shown that relative EPO deficiency is the key cause of the anemia and that the response of hematopoietic progenitor cells is not usually diminished in renal failure. However, reduced iron availability, inadequate dialysis, infection and hyperparathyroidism can all impair the efficacy of EPO. Therapeutic use of EPO has also shown clearly for the first time that anemia is responsible for a significant proportion of morbidity in patients with chronic renal failure and probably also contributes to increased mortality through its cardiovascular complications.