Single injection of phenylhydrazine[PH] reduced the number of RBC and haemoglobin content; decreased myeloid; erythroid cell ratio in bone marrow and increased Cathepsin D activity in spleen of rats. Ayurvedic drugs raktavardhak, punarnavasav and navayas louh recovered the number of RBC and haemoglobin content and raised myeloid: erythroid cell ratio and normalised cathepsin D activities by counteracting the action phenyl hydrazine. The results confirm the claims of ayurveda that these drugs possess the potency to cure anaemia through protection of RBCs from haemolysis and simultaneously lowering cathepsin D activities from the spleen.