The addition of exogenous H2O2 inhibited hypoxia-induced erythropoietin (Epo) production in the human hepatoma cell line HepG2. Likewise, elevation of endogenous H2O2 levels by the addition of menadione or the catalase inhibitor, aminotriazole, dose-dependently lowered Epo production. The inhibitory effect of exogenous H2O2 on Epo formation could be completely overcome by co-incubation with catalase. When GSH levels in HepG2 cells were lowered, Epo production was more susceptible to H2O2-induced inhibition, indicating that H2O2 might affect thiol groups in regulatory proteins. Endogenous production of H2O2 in HepG2 cells was dependent on the pericellular O-2 tension, being lowest under conditions of hypoxia. Our results support the hypothesis that an H2O2-generating haem protein might be part of the O-2 sensor that controls Epo production. High H2O2 levels under conditions of normoxia suppress, whereas lower levels in hypoxic cells allow epo gene expression.