The injection of recombinant erythropoietin (Epo) is now widely used for long-term treatment of anemia associated with chronic renal failure, cancer, and human immunodeficiency virus infections. The ability to deliver this hormone by gene therapy rather than by repeated injections could provide substantial clinical and economic benefits. As a preliminary approach, we investigated in rats the expression and biological effects of transplanting autologous vascular smooth muscle cells transduced with a retroviral vector encoding rat Epo cDNA. Vector-derived Epo secretion caused increases in reticulocytes, with peak levels of 7.8-9.6% around day 10 after implantation. The initial elevation in reticulocytes was followed by clinically significant increases in hematocrit and hemoglobin for up to 11 weeks. Ten control and treated animals showed mean hematocrits of 44.9 +/- 0.4% and 58.7 +/- 3.1%, respectively (P < 0.001), and hemoglobin values of 15.6 +/- 0.1 g/dl and 19.8 +/- 0.9 g/dl, respectively (P < 0.001). There were no significant differences between control and treated animals in the number of white blood cells and platelets. Kidney and to a lesser extent liver are specific organs that synthesize Epo in response to tissue oxygenation. In the treated animals, endogenous Epo mRNA was largely down regulated in kidney and absent from liver. These results indicate that vascular smooth muscle cells can be genetically modified to provide treatment of anemias due to Epo deficiency and suggest that this cell type may be targeted in the treatment of other diseases requiring systemic therapeutic protein delivery.