Anaemia occurs frequently during critical illness. Recent studies have increased our understanding of how well critically ill patients tolerate anaemia. It is known that anaemia does not result simply from diagnostic and physical blood loss, but is multifactorial in origin. Recently, abnormalities in circulating red cell function have been described that are potentially relevant to efficient oxygen delivery. Potential new approaches to the management of the anaemic patient during critical illness have also been evaluated. This narrative review considers methodological issues relevant to understanding the critical care literature on anaemia. We summarize current understanding of the prevalence of anaemia during critical illness, specifically among patients in intensive care units (ICUs), and discuss the various factors that contribute to its development. We consider how red cell function may alter during critical illness and the possible clinical relevance of these changes. The treatment of anaemia is discussed, with particular emphasis on haemoglobin triggers for allogeneic red cell transfusions among critically ill patients, with reference to clinically important subgroups. The place of erythropoietin, an emerging therapy for anaemia in this setting, is considered and key future research questions identified.