In situ hybridization using antisense RNA probes was used to localize cells that produce erythropoietin (EPO) in the livers of anemic transgenic mice expressing the human EPO gene and in livers of anemic nontransgenic mice. In transgenic mice bled from a hematocrit of 55% to one of 10%, hepatocytes surrounding central veins synthesized large amounts of human EPO mRNA. EPO-producing cells were very rare in the area of portal triads. In transgenic mice bled to a hematocrit of 20%, a similar number and distribution of cells contained human EPO mRNA as was found with a 10% hematocrit, but the cells were less heavily labeled, indicating increased EPO production per cell at 10% hematocrit as compared with 20% hematocrit. No human EPO mRNA was detected in the kidneys of anemic transgenic mice, although endogenous murine EPO mRNA was strongly expressed in cortical interstitial cells. In sections of livers from nontransgenic mice bled from a hematocrit of 45% to one of 10%, only isolated cells produced EPO. When the types of cells could clearly be identified, approximately 80% of these cells were hepatocytes, while 20% had a nonepithelial morphology and were located in or adjacent to the sinusoidal spaces. When the sense strand was used as the RNA probe for in situ hybridization, no labeled cells were seen in normal or anemic livers. These results demonstrate that hepatocytes are responsible for production of EPO in both transgenic and nontransgenic mice and that a second cell type that is similar in morphology to EPO-producing interstitial cells in the kidney also produces EPO in the livers of nontransgenic mice.