In an in vitro model of cerebral ischemia (oxygen glucose deprivation, OGD) we investigated whether erythropoietin (EPO) plays a critical role in ischemic preconditioning. We found that EPO time and dose-dependently induced protection against OGD in rat primary cortical neurons. Protection was significant at 5 min and reached a maximum at 48 hr after EPO application. Protection was blocked by the coapplication of a soluble Epo receptor (sEpoR) or an antibody against EpoR (anti-EpoR). Medium transfer from OGD-treated astrocytes to untreated neurons induced protection against OGD in neurons, which was attenuated strongly by the application of sEpoR and anti-EpoR. In contrast, medium transfer from OGD-treated neurons to untreated neurons induced protection against OGD that did not involve EPO. In astrocytes the OGD enhanced the nuclear translocation of hypoxia-inducible factor 1 (HIF-1), the major transcription factor regulating EPO expression. Consequently, transcription of EPO-mRNA was increased in astrocytes after OGD. Cultured neurons express EpoR, and the Janus kinase-2 (JAK-2) inhibitor AG490 abolished EPO-induced tolerance against OGD. Furthermore, EPO-induced neuroprotection as well as phosphorylation of the proapoptotic Bcl family member Bad was reduced by the phosphoinositide-3 kinase (PI3K) inhibitor LY294002. The results suggest that astrocytes challenged with OGD provide paracrine protective signals to neurons. We provide evidence for the following signaling cascade: HIF-1 is activated rapidly by hypoxia in astrocytes. After HIF-1 activation the astrocytes express and release EPO. EPO activates the neuronal EPO receptor and, subsequently, JAK-2 and thereby PI3K. PI3K deactivates BAD via Akt-mediated phosphorylation and thus may inhibit hypoxia-induced apoptosis in neurons. Our results establish EPO as an important paracrine neuroprotective mediator of ischemic preconditioning.