The human hepatoma cell line, Hep3B, synthesizes large quantities of erythropoietin (Epo) mRNA and protein in a regulated manner in response to hypoxia and cobaltous chloride (CoCl2). To further understand the regulation of Epo gene expression, we studied the effects of hypoxia and CoCl2 on the rate of Epo gene transcription. While Northern blot analyses showed that steady-state Epo mRNA levels increase more than 50- fold in response to hypoxia or CoCl2, nuclear run-off experiments demonstrated only a 10-fold increase in Epo gene transcription in response to these stimuli. In the presence of either actinomycin D (Act D) or cycloheximide, the stability of biologically functional Epo mRNA was much greater than that observed in the absence of these agents and much greater than that which has been reported in vivo. These findings suggest that the stability of Epo mRNA is modulated by the transcription and translation of rapidly turning over gene product(s). Thus, Epo mRNA levels are determined by both the rate of gene transcription and posttranscriptional events. These experiments demonstrate a potential pitfall in estimating mRNA half-lives based on Act D chase experiments alone.