EPO plays a key role in O2 homeostasis by regulating blood O2-carrying capacity. The EPO gene is expressed in fetal liver, whereas after birth the kidney becomes the predominant site of synthesis. Transgenic studies indicate that EPO expression in postnatal liver is repressed via DNA sequences that are distant from the gene. Expression in postnatal kidney is dependent upon sequences located between 6 kb and 14 kb 5' to the transcription initiation site. Additional sites of low-level EPO synthesis have been identified, but the functional significance of these observations is unknown at the present time. Modulation of transcription by changes in cellular O2 tension has been studied in the hepatic cell lines Hep3B and HepG2. A kidney-derived cell line in which EPO expression is regulated by O2 tension has not been established. A hypoxia-inducible enhancer, identified in the EPO 3'-flanking sequence, contains binding sites for several transcription factors, including HIF-1, a factor whose DNA-binding activity is induced by hypoxia. Binding of HIF-1 is required for EPO transcriptional activation in response to hypoxia. HIF-1 binding sites are also present in the EPO promoter, which may also play a role in hypoxia-inducible transcription. Binding sites for members of the nuclear hormone receptor superfamily are also present in both the promoter and enhancer. The hypoxia signal-transduction pathway leading to EPO transcriptional activation has not been established. Two hypothetical mechanisms of O2 sensing are oxy-deoxy conformational changes of a hemoprotein and the production of reactive O2 species from molecular O2. HIF-1 activity is induced in a variety of cell types, and in all cell types a single signal transduction pathway appears operative, but its nature is undefined. Moreover, genes encoding glycolytic enzymes are transcriptionally activated in hypoxic cells via a similar mechanism, including the binding of HIF-1 to promoter and enhancer elements. Thus, the molecular mechanisms by which EPO transcription is regulated may also be utilized to control the expression of other genes responsible for cellular and systemic O2 homeostasis.