In order to characterize the defect in erythroid homeostasis in chronic inflammatory states, the relationship between erythropoietin production and erythropoietic response was examined in rats with adjuvant disease. Exposure of adjuvant-injected rats to graded levels of lowered barometric pressure induced increases in plasma erythropoietin which were significantly less than those measured in normal animals similarly stimulated. Erythropoietin inhibitors were not detected by in vitro or in vivo assay techniques: the biological activity of ovine erythropoietin was not modified by incubation with plasma from rats with adjuvant disease; the erythropoietic response of ex-hypoxic polycythemic mice to erythropoietin was not compromised by injections of test plasma; and the burst of erythropoiesis induced in ex-hypoxic polycythemic mice by a hypobaric stimulus was not modified by plasma given prior to or at various intervals after hypobaric exposure. Exogenous erythropoietin elicited nearly identical increases of radioiron incorporation in normal and adjuvant-injected rats whose endogenous erythropoietin was suppressed by hypertransfusion. It is concluded that the diminished erythropoietic response to anemia in adjuvant-induced chronic inflammation results from a relative failure in the production of biologically active erythropoietin.