We investigated the pathophysiology of erythropoiesis in 62 patients with multiple myeloma and examined whether it would establish a rational basis for the treatment of their anaemia with recombinant human erythropoietin. Erythropoietin (Epo) production was evaluated by serum levels and erythropoiesis was quantitated by serum transferrin receptor (TfR) levels, both assessed relative to the degree of anaemia. Instead of the expected stimulation of erythropoiesis in response to anaemia, haematocrit correlated positively with marrow erythropoietic activity, indicating that the mechanism of anaemia was primarily defective red cell production. Erythropoiesis decreased and anaemia worsened significantly with advancing clinical stage. 25% of the patients had inadequate Epo production and this proportion increased to 50% in stage 3. Inappropriate Epo production was seen in 60% of patients with renal impairment but was also observed in a number of patients with normal renal function. Erythropoiesis correlated strongly with the adequacy of Epo production, particularly in advanced disease. We conclude that most myeloma patients have defective red cell production even in the absence of massive marrow infiltration and that inappropriate Epo production contributes to their anaemia.