Anemia can contribute to chronic allograft injury by limiting oxygen delivery to tissues, particularly in the tubulointerstitium. To determine mechanisms by which erythropoietin (EPO) prevents chronic allograft injury we utilized a rat model of full MHC-mismatched kidney transplantation (Wistar Furth donor and Lewis recipients) with removal of the native kidneys. EPO treatment entirely corrected post-transplant anemia. Control rats developed progressive proteinuria and graft dysfunction, tubulointerstitial damage, inflammatory cell infiltration, and glomerulosclerosis, all prevented by EPO. Normalization of post-transplant hemoglobin levels by blood transfusions, however, had no impact on chronic allograft injury, indicating that EPO-mediated graft protection went beyond the correction of anemia. Compared to syngeneic grafts, control allografts had loss of peritubular capillaries, higher tubular apoptosis, tubular and glomerular oxidative injury, and reduced expression of podocyte nephrin; all prevented by EPO treatment. The effects of EPO were associated with preservation of intragraft expression of angiogenic factors, upregulation of the anti-apoptotic factor p-Akt in tubuli, and increased expression of Bcl-2. Inhibition of p-Akt by Wortmannin partially antagonized the effect of EPO on allograft injury and tubular apoptosis, and prevented EPO-induced Bcl-2 upregulation. Thus non-erythropoietic derivatives of EPO may be useful to prevent chronic renal allograft injury.