In the last decade the nephrology community has learned much about the impact of anemia on patients with kidney disease. Therapy of anemia can correct many of the symptoms which seriously compromise patient function. Despite the obvious benefits, controversy continues regarding the optimal target hemoglobin concentration both in patients prior to dialysis and in dialysis populations. In this editorial we review the clinical data that contribute to this controversy and the physiologic concepts underlying the treatment of anemia. Furthermore, we discuss the need to individualize hemoglobin targets for specific patient populations and the importance of early identification and treatment of anemia in patients with kidney disease. The economic impact of normalizing hemoglobin with the use of erythropoietin and intravenous or oral iron has affected clinical practice over the last decade. Current guidelines published by Kidney Disease Outcomes and Quality Initiative (KDOQI), the European Working Group on Anemia Management, and the Canadian Society of Nephrology all recommend target hemoglobin concentrations and thresholds for initiation of therapy and also suggest the need for reevaluation of current targets in light of new evidence. This editorial supports those guidelines and challenges the reader to critically evaluate current practice in the context of the accumulating data and the physiologic principles discussed herein. The therapy of anemia in patients with chronic kidney disease (CKD) is becoming increasingly sophisticated and is an essential component of care in patients with CKD. However, the effects of therapy will be most impressive when accompanied by the optimal care of all hemodynamic and metabolic abnormalities that are associated with CKD.