In an experiment to determine the effects of cobalt on the renal erythropoietic factor and kidney hydrolase activity in the rat we obtained the following results: Cobalt produced significant increases in renal erythropoietic factor activity and plasma levels of erythropoietin which reached peak activity 12 hr after treatment. It also produced an increase in the activity of renal hydrolases, cathepsins A and B, which paralleled the increase in renal erythropoietic factor activity. Enzyme inhibitors which are specific for proteases, esterases, and metalloenzymes inhibited the activity of the renal erythropoietic factor in vitro. Polycythemic mice exposed to 7- and 8-day posthypoxic intervals still retained their ability to respond to in vitro generated erythropoietin when compared to mice treated on the fourth posthypoxic day. The erythropoietic activity generated by the light mitochondrial extract—normal rat serum (LME-NRS) reaction mixture was blocked by the antibody to erythropoietin. The relative concentrations of smooth and rough endoplasmic reticulum (microsomes) and vesicles (lysosomes) were approximately the same in the light mitochondrial fractions of kidneys from normal and cobalt-treated rats. Marker enzyme studies revealed primarily alkaline phosphatase activity in the light mitochondrial fraction. These studies correlate with electron micrographs of the LME which indicate a fraction composed mainly of microsomes. In addition, these data suggest a possible relationship between renal lysosomal hydrolase activity and the renal erythropoietic factor (Erythrogenin).