Results on the localization of erythropoietin (Epo) synthesis in renal cells have been contradictory, implicating either interstitial or tubular cells. We fused the lacZ gene to a 7-kb DNA fragment of the mouse Epo gene encompassing a portion of the first intron, the first exon, and a 6-kb sequence of the 5′-flanking region. Transgenic mice carrying this construct show a low level of specific expression of the lacZ gene in proximal convoluted tubule (PCT) cells. Without hypoxia, no significant expression was detected in the liver. Hypoxia induced a large degree of lacZ expression, mainly in kidney PCT cells and to a lesser degree in liver. However, anemia induced lacZ expression in both kidney and liver. These findings indicate that, under these conditions, Epo is expressed in tubular cells, specifically PCT cells.