Erythropoietin (EPO) promotes proliferation and differentiation of erythroid progenitors and the survival of maturing erythroid cells. Here, we investigated the role of EPO in brain repair after stroke. Rats were treated with recombinant human EPO (rhEPO) at 24 hours after the onset of embolic stroke. An array of behavior tests was performed. Rats were euthanized 28 days after stroke for measurements of infarct volume, angiogenesis, and neurogenesis. In vitro, neurospheres derived from the subventricular zone (SVZ) of the rat and cerebral endothelial cells derived from the mouse were treated with rhEPO. Capillary-like tube formation and neuronal differentiation were measured. Treatment with rhEPO significantly improved functional recovery, along with increases in density of cerebral microvessels at the stroke boundary and numbers of BrdU, doublecortin, and nestin immunoreactive cells in the SVZ. rhEPO treatment significantly increased brain levels of vascular endothelial growth factor (VEGF) and brain-derived neurotrophic factor (BDNF). In vitro, rhEPO enhanced capillary tube formation of cerebral endothelial cells, which was inhibited by a specific VEGF receptor 2 antagonist (SU1498). Incubation of neurospheres derived from stroke SVZ with anti-EPO neutralizing antibody inhibited neurogenesis, whereas incubation of stroke-derived neurospheres with rhEPO enhanced neurogenesis. Our data suggest that EPO-increased VEGF and BDNF may be involved in angiogenesis and neurogenesis, which could contribute to functional recovery.