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 O2 tension, being lowest under conditions of hypoxia. Our results support the hypothesis that an H2O2-generating haem protein might be part of the O2 sensor that controls Epo production. High H2O2 levels under conditions of normoxia suppress, whereas lower levels in hypoxic cells allow epo gene expression.