In vivo gene transfer is being considered in the systemic delivery of therapeutic proteins. This report evaluates the use of AAV vectors administered into muscle to deliver erythropoietin (Epo) for the treatment of anemia in a mouse model of beta-thalassemia. Injection of vector expressing Epo from a constitutive promoter resulted in Epo overproduction and improved erythropoiesis. However, severe and lethal polycythemia developed. In order to titrate the expression of Epo to therapeutic and non-toxic levels, vectors were constructed to allow pharmacologic control of Epo transcription. Specifically, expression of Epo was dependent on the presence of a chimeric transcription factor that is activated by the orally available small molecule drug rapamycin. beta-thalassemic mice injected with vectors containing the regulated Epo gene failed to show any effect until they were administered a regimen of rapamycin, which led to the production of Epo and an increase in hematocrit values. Epo expression and its hematologic consequences were directly dependent on the dose of rapamycin and were completely reversed when rapamycin was withdrawn. The increase in hematocrit was associated with partial improvements in the abnormalities of red blood cell morphology. This study confirms the value of pharmacologic regulation of transgene expression in the development of safe and effective gene therapies in which biologically active secreted proteins are produced.