Diabetic retinopathy (DR) is a chronic, low-grade inflammatory disease. We aimed to investigate the regulatory effects of erythropoietin (EPO) on the inflammatory cytokine production by Muller cells under the condition of DR. The expression levels of TNF-alpha, IL-1beta, IL-6 and VEGF in cultured rat Muller cells were enhanced by 1 mM glyoxal. The elevated TNF-alpha and IL-1beta, but not IL-6 and VEGF, were decreased by 2 U/ml EPO as detected by real-time PCR and ELISA. Moreover, the activity of AP-1 but not NF-kappaB was modulated by glyoxal and EPO. Intravitreal injection of EPO performed 24 h prior to sacrifice significantly reduced TNF-alpha and IL-1beta production while moderately attenuating IL-6 and VEGF in the retinas of streptozotocin-induced diabetic rats. Furthermore, Muller cells were identified as the main source of IL-1beta production as indicated by co-localization of IL-1beta and CRALBP in situ. These findings implicate therapeutic potential of EPO in the amelioration of inflammation in diabetic retinas.