The polypeptide hormone erythropoietin (Ep) is a growth factor whose actions on the erythroid progenitor cell induce proliferation and differentiation. The signal transduction system activated by Ep to mediate these cellular processes remains largely uncharacterized despite many years of research devoted to its elucidation. It is clear that an Ep receptor-mediated activation of adenylate cyclase or guanylate cyclase does not occur, although cAMP and cGMP may play modulatory roles. The role of calcium in the action of Ep is less clear. Although the presence of extracellular calcium seems to be an absolute requirement for Ep-induced proliferation, the positive changes induced by Ep in intracellular calcium occur with a time course suggestive of influx through ion channels opening within the cell membrane rather than release of intracellular stores by inositol trisphosphate. There is good evidence for the involvement of phospholipases A2 and C in the actions of Ep, including an early rise in lipoxygenase metabolites of arachidonic acid. Activation of phospholipase C can also result in the activation of protein kinase C in response to Ep. We present a model for the signal transduction pathway of Ep that is consistent with current knowledge and provides a framework for the coordinate actions of several intracellular mechanisms in the mediation of Ep-induced proliferation.