The proliferation and differentiation of erythroid cells is a highly regulated process that is controlled primarily at the level of interaction of erythropoietin (Epo) with its specific cell surface receptor (EpoR). However, this process is deregulated in mice infected with the Friend spleen focus-forming virus (SFFV). Unlike normal erythroid cells, erythroid cells from SFFV-infected mice are able to proliferate and differentiate in the absence of Epo, resulting in erythroid hyperplasia and leukemia. Over the past 20 years, studies have been carried out to identify the viral genes responsible for the pathogenicity of SFFV and to understand how expression of these genes leads to the deregulation of erythropoiesis in infected animals. The studies have revealed that SFFV encodes a unique envelope glycoprotein which interacts specifically with the EpoR at the cell surface, resulting in activation of the receptor and subsequent activation of erythroid signal transduction pathways. This leads to the proliferation and differentiation of erythroid precursor cells in the absence of Epo. Although the precise mechanism by which the viral protein activates the EpoR is not yet known, it has been proposed that it causes dimerization of the receptor, resulting in constitutive activation of Epo signal transduction pathways. While interaction of the SFFV envelope glycoprotein with the EpoR leads to Epo-independent erythroid hyperplasia, this is not sufficient to transform these cells. Transformation requires the viral activation of the cellular gene Sfpi-1, whose product is thought to block erythroid cell differentiation. By understanding how SFFV can deregulate erythropoiesis, we may gain insights into the causes and treatment of related diseases in man.