Increased understanding of the pathophysiology of anemia of prematurity (AOP) has emerged over the past years. It is apparent that low levels of endogenous erythropoietin (Epo) is the basis for this phenomenon. This has resulted in an effective therapeutic approach for this condition. Administration of Epo can ameliorate the signs and symptoms of AOP and lessen, and in many cases avoid, the necessity for blood transfusion.