In long-term hamster bone marrow cultures, proliferation and differentiation of hemopoietic stem cells occurs for several months without need for hydrocortisone or adherent stromal elements, which are requirements for bone marrow growth in all other species studied. Only the most primitive erythroid progenitors (BFU-E) are produced in the cultures. Following treatment of the cells with erythropoietin, these progenitor cells undergo differentiation into mature hemoglobinized red blood cells. Concomitant addition of erythropoietin (Epo) and prostaglandin-E1 (PGE1) results in the production of large numbers of maturing red blood cells. In cultures stimulated with Epo and PGE1, as many as 70% of the cells are benzidine-positive, while Epo alone stimulated as many as 45% of the cells to become erythroid. Epo and PGE1 do not have any apparent deleterious effect on the continuous hemopoiesis occurring in these cultures. Under identical conditions, syngeneic adherent cell cultures do not produce any erythroid elements. The development of mature red blood cells from primitive erythroid precursors occurs in the presence of Epo alone and without any apparent need for adherent stromal elements. These cultures provide a useful in vitro model for dissecting the positive and negative signals that regulate erythropoiesis.