The cytokine erythropoietin (EPO) is the master regulator of erythropoiesis. Intriguingly, many studies have shown that the cognitive performance of patients receiving EPO for its hematopoietic effects is enhanced, which prompted the growing interest in the use of EPO-based strategies to treat neuropsychiatric disorders. EPO plays key roles in brain development and maturation, but also modulates synaptic transmission. However, the mechanisms underlying the latter have remained elusive. Here, we show that acute (40-60 min) exposure to EPO presynaptically downregulates spontaneous and afferent-evoked excitatory transmission, without affecting basal firing of action potentials. Conversely, prolonged (3 h) exposure to EPO, if followed by a recovery period (1 h), is able to elicit a homeostatic increase in excitatory spontaneous, but not in evoked, synaptic transmission. These data lend support to the emerging view that segregated pathways underlie spontaneous and evoked neurotransmitter release. Furthermore, we show that prolonged exposure to EPO facilitates a form of hippocampal long-term potentiation that requires noncanonical recruitment of calcium-permeable AMPA receptors for its maintenance. These findings provide important new insight into the mechanisms by which EPO enhances neuronal function, learning, and memory.