Erythropoietin (EPO) has emerged as a versatile growth factor that has transcended its traditional role as a mediator of erythroid maturation to one that modulates stem cell development, cellular protection and angiogenesis in the brain. As a possible candidate for nervous system disorders, it becomes crucial to understand the cellular mechanisms that foster cytoprotection rather than cytotoxicity for EPO. EPO offers novel neuronal and vascular protection not only through the maintenance of cellular integrity, but also through the prevention of cellular inflammation. The protective and anti-inflammatory capacities of EPO originate with the Janus tyrosine kinase 2 protein and protein kinase B (Akt). Downstream cellular pathways include FOXO3a, GSK-3beta, Bad, Bcl-xL, NF-kappaB, mitochondrial membrane permeability, APAF-1 and caspases. Further understanding of the cellular pathways that are susceptible to modulation by EPO will be crucial to foster the development of this agent as a robust and efficacious therapy for the brain.